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Newcrest Mining Ltd NCM Stock Quote

Morningstar‘s Stock Analysis NCM

Valuation
Currency in AUD
Is it the right time to buy or sell?
Is it the right time to buy or sell?

1-Star Price

INVESTOR

5-Star Price

INVESTOR

Economic Moat

INVESTOR

Capital Allocation

INVESTOR

No-Moat Newcrest Mining Remains Undervalued and One of Our Best Ideas; AUD 31 FVE Retained

Jon Mills, CFA Equity Analyst

Analyst Note

| Jon Mills, CFA |

After reviewing our production and cost assumptions, we retain our fair value estimate of AUD 31 per share for no-moat Newcrest Mining and it remains one of our Best Ideas. Due to a technical error, our last note published Aug. 22, 2022 displayed incorrect financial data and an incorrect fair value estimate of AUD 31 per share with a 5-star rating. The correct fair value estimate should have been AUD 29 with a 4-star rating. However, after correcting the error and incorporating our latest foreign exchange assumptions into our model, our fair value estimate remains AUD 31. We also lower our fair value uncertainty rating to Medium from High. Cyclical commodity prices and high capital intensity are partially offset by its low-cost position and moderate financial leverage. Gold prices also tend to be relatively uncorrelated to the broader economic cycle.

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Key Statistics NCM

Company Profile NCM

Business Description

Newcrest is an Australia-based gold and, to a lesser extent, copper miner. Operations are mainly in Australia and Papua New Guinea. The company also owns a 32% stake in the Fruta Del Norte gold mine in Ecuador, while the acquisition of Brucejack in 2022 adds to its 70% stake in the Red Chris mine in Canada. The company is likely to produce around 2 million ounces of gold per year over the next decade, making it one of the larger global gold producers but still only accounting for less than 2% of total supply. Cash costs are below the industry average and amongst the lowest of the global gold miners, underpinned by improvements at Lihir and Cadia. Organic growth options include its Havieron prospect, the Red Chris underground mine, and the high-grade Wafi-Golpu copper-gold prospect in PNG.

Contact
600 Saint Kilda Road, Level 8
Melbourne, VIC, 3004, Australia
T +61 395225333
Industry Gold
Most Recent Earnings
Fiscal Year End Jun 30, 2023
Employees 1,947

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