Earlier this month, Newmont made an unsolicited all-stock offer of $17 billion to acquire Australian gold miner Newcrest, an offer the Australians were quick to reject. Most observers are expecting more action in mining M&A now. Even Newmont’s main rival, Barrick Gold, whose CEO pooh-poohed acquisitions last year, may be looking for an opportunity after production fell to a 22-year low last year.
Analysts remain cautious on Newmont, with 13 of 23 brokerages a Hold rating while nine have Buy or Strong Buy ratings. At a share price of around $44.80, the upside potential based on a median price target of $57.68 is 28.8%. At the high price target of $70.00, the upside potential is 56.3%.
Fourth-quarter revenue is forecast at $3.1 billion, up 17.6% sequentially but down 8.6% year over year. Adjusted EPS are forecast at $0.45, up 65.8% sequentially but 42.3% lower year over year. For the full 2022 fiscal year, estimates call for EPS of $1.86, down 37.2%, on sales of $11.8 billion, down 3.4%.
Newmont stock trades at 24.2 times expected 2022 earnings, 20.4 times estimated 2023 earnings of $2.20 and 17.3 times estimated 2024 earnings of $2.61 per share. The stock’s 52-week range is $37.45 to $86.37. Newmont pays an annual dividend of $2.20 (yield of 4.84%). Total shareholder return for the past year was negative 30.72%.
Nikola
Over the past 12 months, electric and hydrogen-powered truck maker Nikola Corp. (NASDAQ: NKLA) has seen its share price tumble by almost 70%. The company set an all-time low in mid-December for its two-and-a-half-year public life. Its prospects might be brightening, however. The California State Teachers’ Retirement System, which manages more than $311 billion in assets, raised its holding in Nikola by 57,456 shares to 412,293 shares during the fourth quarter. Nikola also has said it plans to build a hydrogen refueling network to support its fuel cell-powered trucks.
Just seven analysts cover the stock, and five of those have Hold ratings. The other two rate the stock a Buy. At a share price of around $2.40, the upside potential based on a median price target of $5.00 is 108.3%. At the high price target of $10.00, the implied gain is 317%. Note that about 30% of Nikola’s outstanding stock (about 43% of the float) is owned by institutions. The average daily trading volume in the shares is around 12 million.
Analysts are forecasting fourth-quarter revenue at $33.49 million, up 38.16% sequentially, and expect Nikola to report a loss per share of $0.27. In the prior quarter, Nikola reported a loss of $0.42 per share and no revenue. For the full year, the company is expected to lose $1.19 per share, more than the loss per share of $0.79 in 2021. Analysts also expect Nikola to report $75.41 million in revenue for the full fiscal year. The company did not report any revenue last year.
Nikola is not expected to post a profit in 2022, 2023 or 2024. The enterprise value to sales multiple for 2022 is 16.2. For 2023 and 2024, the multiple is 3.8 and 1.2, respectively. The stock’s 52-week range is $2.01 to $11.87. Nikola does not pay a dividend. Total shareholder return for the past 12 months is negative 69.32%.
Originally published at 24/7 Wall St.
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