Newmont Corporation (NEM +2.53%) stock jumped 2.6% through 11:35 a.m. ET Monday after investment bank Scotiabank raised its price target on the mining stock a whopping 33%, to $152 per share, with an outperform rating (i.e., buy).
Image source: Getty Images.
Why Scotiabank loves Newmont stock
Gold prices surged past the $5,000 mark this morning, hitting $5,070.70 per ounce at last report. The price of this shiny metal is up more than 83% over the past year -- and indeed, up more than 17% just so far this year!
That's obviously good for a gold mining stock like Newmont, and Scotiabank says it is updating its price targets for all gold and precious minerals stocks it covers, in response to the high-flying prices, as TheFly.com reports today.
In other news, Reuters reports today that Newmont rival Barrick Mining (B +2.66%) is trying to spin off its North American assets. Newmont has the right of first refusal to buy the rest of Barrick's Nevada Gold Mines project, which is Barrick's main North American asset -- and already 38.5%-owned by Newmont. Theoretically at least, Newmont's take in the asset could empower it to prevent Barrick's spinoff (impeding a rival) -- or to buy the asset if it wants it.
NYSE: NEM
Key Data Points
Is Newmont stock a buy?
Newmont's doing just fine as-is, by the way. Last quarter alone, the company's revenue shot up 20% -- and its earnings nearly doubled.
With the stock trading under 20 times earnings, and earnings expected to grow more than 58% annually over the next five years, Newmont is in an excellent position to profit from the skyrocketing price of gold, whether or not it buys the rest of Barrick's Nevada property.
Investors in Newmont stock should do quite well, also.
