Analysts Take a Shine to Newmont Goldcorp

Most analysts are already upbeat toward the mining stock

by Karee Venema

Published on Sep 11, 2019 at 10:30 AM

BMO Capital Markets upgraded Newmont Goldcorp Corp (NYSE:NEM) to "outperform" from "market perform," and raised its price target to $50 from $45 -- a 31% premium to last night's close at $38.16. The brokerage firm said the gold miner is in the early stages of a turnaround, and sees an attractive risk/reward setup. This bullish outlook is being echoed by Citigroup, which lifted its NEM price target to $46 from $44.

These are just the latest bull notes for the gold stock, with RBC upping its Newmont Goldcorp rating to "sector perform" on Monday, and a price-target hike from CFRA coming through last week. More broadly, seven of 12 analysts call NEM a "buy" or better, while the average 12-month price target sits at $46.33.

The last time the shares traded above $46.33 was January 2013. More recently, NEM stock is up 28% since its mid-May lows near $30, last seen trading 3.1% higher at $39.18. And while the security has pulled back from its nearly two-year peak of $41.23 on Aug. 28, the $38 region -- home to a late-June bull gap -- emerged as support.

One options trader may be betting on this level to continue to serve as a floor over the next several weeks. The October 38 put has seen the biggest increase in open interest over the last 10 days, with roughly 9,100 new positions added. The bulk of this activity occurred last Wednesday, Sept. 4, when an 8,572-contract block crossed closer to the bid price, suggesting it was sold to open.

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