Shares in gold miner Newmont Corp (NYSE: NEM) rose by as much as 5.4% in early morning trading today.
Yes, the price of gold is up slightly as I write, but that’s not the real reason investors feel more optimistic today
The likely catalyst for the stock’s move today is a TD Cowen analyst’s upgrade of the stock from a hold recommendation to a buy, even as the analyst, Steven Green, nudged the price target down to $127 from $129. TD Cowen upgrades Newmont stock The stock has been weak recently and is down by a low single-digit percentage on the year. That’s enticing enough to encourage the analyst to recommend the stock on valuation grounds.
Evaluating commodity stocks like Newmont is always a difficult endeavor, as it always implies some sort of assumption for the underlying commodity it produces; in this case, gold. The case for Newmont and gold However, I do think there’s a strong case for agreeing with the analyst. The weakness in gold prices this year is not surprising, given the rush by investors to invest in the precious metal last year.