Lubin Investment · Blog

Newmont (NEM): Q2 2026 results, my verdict

2026-07-24 ·

NEM: see the full analysis on Lubin Investment

Newmont reported net income of $2.2 billion and record quarterly free cash flow on July 23, 2026, despite revenue coming in slightly below expectations. The gold miner is one of the rare names in its sector to validate nearly all of my quality criteria, and yet its stock trades in the cheapest third of its own recent history. Here is why, backed by real numbers.

A quarter that disappoints on paper, but hides the real story

Newmont reported second quarter 2026 results on July 23, 2026 that looked mixed at first glance: adjusted earnings per share of $2.10, slightly below analyst consensus ($2.12), and revenue about 4% below market expectations. On those two figures alone, one could conclude a disappointing quarter. But looking only at consensus misses the real story: net income came in at $2.2 billion, and more importantly, the company generated a record quarterly free cash flow of $2.2 billion, with $2.9 billion in cash from operations. A slight miss against analyst expectations has little to do with the question that actually matters for judging quality: how much real cash is coming in the door?

The operating detail explains much of the story: Newmont produced roughly 1.3 million ounces of gold, but also 17,000 tonnes of copper and 7 million ounces of silver, secondary metals that diversify its revenue beyond gold alone. On costs, the all-in cost of production (AISC, explained below) came in at $1,621 per ounce, below the full year target of $1,680: cost discipline that holds even as many miners let costs drift when the gold price rises. The company returned roughly $1.9 billion to shareholders this quarter (dividends and buybacks combined), with a declared dividend of $0.261 per share.

Why my quality filter validates almost everything (11 out of 12 criteria): an exception in a sector that usually fails

This is the most surprising part of this story. The gold mining sector is structurally one of the hardest to pass through my quality filter: revenue depends on a variable the company does not control (the gold price), production costs vary enormously from mine to mine, and sector majors have a habit of making costly acquisitions that dilute shareholders. On my criteria, most of the big names in the sector typically cap out below 8 out of 10 points. Newmont breaks this pattern: my standard 12 criteria model scores it 11 out of 12, one of the best scores I track across all sectors.

The detail speaks for itself: net margin of 33.9%, well above the mining sector average; sales growth of 19.2% a year on average over five years; free cash flow margin of 36.6%, meaning more than a third of every sales dollar turns into genuinely available cash; and above all, no net debt: the company holds more cash than total debt. The only criterion that fails is shareholder dilution (shares outstanding grew 8.7% a year on average over five years), and this point deserves a full explanation of its own, because it does not tell the story it appears to at first glance.

The mechanism behind the dilution: the acquisition that transformed Newmont

In November 2023, Newmont completed the acquisition of Newcrest Mining for roughly $19 billion, paid mostly in Newmont shares, creating what the company presents as the world's leading gold AND copper company, with more than half of the world's so-called 'Tier 1' gold mines (the most profitable and longest-lived deposits) now in its portfolio. This massive share issuance to pay for the acquisition explains the dilution measured over five years: shares outstanding went from roughly 795 million in 2022 to 841 million in 2023, then to 1.15 billion in 2024 as the deal was finalized, before starting to ease slightly to 1.1 billion in 2025 thanks to early buybacks. An acquisition paid in stock always dilutes existing shareholders in the short run: the real question is whether the acquired assets then generate enough extra cash for each share, even with more shares outstanding, to be worth more. The 2024-2025 numbers suggest yes.

Free cash flow tells exactly this story in motion: $3.58 billion in 2020, then a collapse to just $97 million in 2023, the year the acquisition was completed (transaction costs, integration spending, capital investment to align the two mine portfolios). Two years later, the rebound is spectacular: $2.96 billion in 2024, then $7.3 billion in 2025, the highest of the period. Debt follows the reverse path: it climbed to $8.9 billion in 2023 to help fund part of the deal, before easing to $5.1 billion in 2025, once the combined entity's cash generation fully kicked in. An acquisition that hurt cash and debt for a year, followed by a clear turnaround the next two years: that is exactly the pattern of an integration that worked, not a failed bet.

The price in three steps: why an 11-out-of-12 stock still trades cheap

The P/FCF (share price divided by free cash flow generated per share) comes out at 11.1 times over the trailing twelve months, a low figure compared to most large caps I track. Placed in its own five year valuation history, this multiple sits at the 34th percentile: the stock trades in the cheapest third of what it has typically cost over the past five years, despite fundamental quality that has just clearly improved. My reasonable buy price model puts the entry point at $156.02, against a current price of $93.19, a discount of roughly 40%.

Why does such a discount persist on a name of this quality? The gold price context provides the answer: gold trades around $4,040 in July 2026, down roughly 28% from its January 2026 peak near $5,595. The market corrected gold miner prices alongside the metal, almost reflexively, even as Newmont's production cost ($1,621 per ounce) stays well below the current price: every ounce sold still generates a comfortable margin of more than $2,400, even after the correction. This discount therefore raises a genuine investment question, not an obvious one: is the market right to stay cautious on gold's future trajectory, or has it, conversely, punished the stock too much given the margin that remains solidly positive at today's price?

Understanding AISC: the real cost of producing an ounce of gold

One figure keeps showing up in miner earnings without being explained: AISC, or all-in sustaining cost. Unlike a simple extraction cost, AISC also includes the spending needed to keep a mine capable of producing year after year: equipment maintenance, replacement exploration drilling, and a portion of capital investment. It is the most honest measure of the true cost of an ounce of gold, because a mine that does not reinvest in its own upkeep eventually runs down. For Newmont, an AISC of $1,621 per ounce against a gold price of $4,040 means a gross margin per ounce of roughly 60%, one of the more favorable spreads in the global gold mining sector, and a direct explanation for the 36.6% free cash flow margin mentioned above.

How I read it

Newmont is a rare case in my coverage: a sector that almost always fails my quality filter (dependence on a commodity price, variable costs, dilutive acquisitions) here produces one of my best scores across all industries. The Newcrest acquisition diluted shareholders and crushed cash for a year, but the following two fiscal years show an integration that pays off: record cash, shrinking debt, cost discipline holding even as gold rose. And yet the stock trades in the cheapest third of its own recent history, because of a gold price correction the market seems to have applied a bit too broadly to a company whose margin per ounce stays solid even after the pullback. You can find the full breakdown on the Newmont analysis page, a comparison of the rare gold miners that pass my quality filter in my sector ranking, and my full methodology.

FAQ

Why did Newmont miss analyst consensus in Q2 2026?

Adjusted earnings per share ($2.10) and revenue came in slightly below market expectations (about 4% for revenue). But the company generated a record quarterly free cash flow of $2.2 billion, which matters more for judging the real quality of the quarter than the consensus miss.

Why does Newmont score so rarely high for a gold miner?

The gold mining sector almost always fails my filter due to its dependence on the gold price and often dilutive acquisitions. Newmont validates 11 out of 12 criteria thanks to a 33.9% net margin, 19.2%/year growth over 5 years, a 36.6% free cash flow margin, and no net debt.

Why did Newmont's share count increase so much?

Newmont acquired Newcrest Mining in November 2023 for roughly $19 billion, paid mostly in stock, which mechanically diluted existing shareholders. The free cash flow that followed ($2.96 billion in 2024, $7.3 billion in 2025) shows the acquisition has since generated enough extra cash to make the deal worthwhile.

What is AISC in a miner's earnings report?

AISC (all-in sustaining cost) is the full cost of producing an ounce of gold: it includes extraction but also equipment maintenance and replacement drilling needed for the mine to keep producing over time. For Newmont, an AISC of $1,621 against gold at $4,040 leaves a margin per ounce of roughly 60%.

Should I buy Newmont stock after these results?

My model sees a discount of roughly 40% (reasonable buy price of $156.02 against a $93.19 share price) on a company with rare fundamental quality for its sector. But this discount also reflects genuine uncertainty about gold's future path. This is not personalized investment advice, do your own research.

NEM: see the full analysis on Lubin Investment

About the author

Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I find fundamental analysis fascinating, and it has delivered excellent results. For three years now, my performance has beaten the S&P 500. But analyzing every stock took too much time: sites with incomplete data, calculation methods and criteria never aligned with mine. And spotting the best stocks was just as time-consuming, even with my own well-defined checklist. So I put my software development background to work to build this software, base my investment strategy on its results, and share it with people who share the same passion as me. It judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).