Newmont’s Lower 2026 Cost Guide Meets a Much Higher Q4 Forecast

Key Takeaways

• Newmont beat the third-quarter adjusted EPS consensus with $2.20 a share, generated $1.912 billion of free cash flow, and recorded its fourth consecutive quarterly estimate beat.
• The company lowered its 2026 by-product AISC guide to $1,520 per ounce from $1,680, but forecasts fourth-quarter AISC of $1,900, 31% above the third quarter’s $1,454.
• The cost reduction reflects a stronger full-year outlook, not a promise of a lower cost run rate: Newmont expects unit costs to trend higher in 2027, while its Q4 forecast also includes higher sustaining capital and oil-related pressure.

The Quarter Generated Cash, but Production Was Lower Year Over Year

Newmont reported adjusted earnings of $2.20 per share for the third quarter, ahead of the roughly $1.96 consensus. Adjusted net income was $2.309 billion, up 23% from $1.883 billion a year earlier. Sales rose 15% year over year to $6.363 billion. The beat extends a four-quarter streak, but the production figures make clear that it was not a story of more gold coming out of the mines.

Attributable gold production was 1.302 million ounces, up 1% from the second quarter but down 8% from the year-ago quarter’s 1.421 million ounces. The company’s realized gold price was $4,317 per ounce, $97 lower than in the second quarter. Those figures put the earnings result in context: Newmont produced less gold year over year, and the quarter’s realized price also eased sequentially. The available figures support a strong earnings and cash result, but do not isolate how much of the year-over-year earnings increase came from price, costs, production, or other factors.

Free cash flow was $1.912 billion, with operating cash flow of $2.768 billion. That is an important result for a capital-intensive producer: the quarter produced cash that can support shareholder returns and investment, rather than only a higher reported profit. But one quarter’s cash flow is not a guarantee of the same pace in future periods, particularly when the company itself forecasts a sharp rise in Q4 unit costs.

The production outlook also has two different time frames. Newmont left its full-year 2026 attributable gold production guide unchanged at about 5.3 million ounces. Its preliminary 2027 outlook calls for output to rise by a low-to-mid single-digit percentage. That projected growth is positive, but the company also expects unit costs to trend higher. Investors therefore have to assess both sides of the outlook: a modestly higher production expectation beyond 2026, and a cost trajectory that is less favorable.

A Lower Annual Cost Guide Does Not Mean Costs Are Falling Into Year-End

Newmont cut its 2026 by-product all-in sustaining cost guidance to $1,520 per ounce from $1,680. That is a $160 reduction, or about 9.5%. It also lowered its 2026 cost applicable to sales guide to $925 per ounce from $1,055, a $130 reduction. The release describes the updated annual outlook as improved.

Those full-year figures are not the same as the company’s forecast for the quarter ahead. Newmont guided to Q4 AISC of about $1,900 per ounce and CAS of $1,250. Against Q3’s by-product AISC of $1,454 and CAS of $832, those forecasts represent increases of about 31% and 50%, respectively.

A full-year average can improve even as the final quarter gets more expensive. Newmont’s lower annual guide should therefore be read as an improvement to the 2026 estimate, not as evidence that the recent cost level will persist through year-end. The key forward-looking number is the Q4 guide: it points to a substantial step-up from Q3, which was a lower-cost quarter.

The company attributes the Q4 increase primarily to higher sustaining capital spending and also cites continued inflationary pressure, including higher oil prices. Its estimate is that a $10-per-barrel change in oil adds about $50 million to costs. That sensitivity helps quantify one source of exposure, but it does not make oil the sole explanation for the forecast increase.

The outlook beyond Q4 adds to the concern. Newmont expects 2027 unit costs to trend higher because of inflation, diesel, the Australian dollar, royalties, and lower co-product credits from Peñasquito. The company expects Q4 Peñasquito silver production to be about half of Q3’s. Lower by-product credits matter because they reduce the credits that offset the costs assigned to gold production. The annual guide cut is real, but the forward evidence does not show a straightforward continuation of falling unit costs.

Cash and Buybacks Provide Flexibility, Not a Cost Solution

Newmont reported $8.8 billion in cash, $12.8 billion in liquidity, and $3.2 billion in net cash. The net-cash figure is before a $1.95 billion payment to Barrick in Q4 under the amended Nevada Gold Mines agreement. The payment is material to the reported cash position; it should not be ignored when weighing the balance sheet, even though the reported figures do not by themselves indicate a financing shortfall.

The company returned $1.9 billion through repurchases and dividends since its previous earnings call. Buybacks accounted for $1.6 billion since July 23, including about $451 million in October. Newmont has executed $3.2 billion of its $6.0 billion repurchase program, leaving $2.8 billion. Its share count has declined by more than 115 million, or about 10%, since February 2024. These figures show the scale of shareholder returns, but do not establish what future buybacks will be or whether repurchases will offset weaker operating results.

The quarterly dividend is $0.26 per share, equivalent to about a 0.9% yield at the October 22 closing price of $114.11. For an investor evaluating Newmont’s cash returns, that makes the dividend a relatively small part of the reported shareholder return compared with the recent repurchases. It also underscores why the buyback program, rather than dividend income alone, is central to the current capital-return story.

There is a competing claim on cash. Newmont expects development capital to rise by about $500 million in 2027, while sustaining capital is expected to be flat. Higher development spending does not automatically make buybacks a poor use of capital, but it means the size and timing of shareholder returns should be considered alongside funding for future projects. The company’s reported cash generation gives it options; the Q4 cost forecast and planned investment mean those options still involve trade-offs.

The October Selloff Came Before the Earnings Release

Newmont closed at $114.11 on October 22, down 2.6% from the previous close. This was the regular-session price before the after-close earnings release, so the decline cannot be described as a reaction to the reported quarter. Gold-mining shares were weak that day: the VanEck Gold Miners ETF fell 5.8%, Agnico Eagle fell 6.0%, and the gold-backed ETF fell 2.6%. Newmont traded about 9.5 million shares, above the roughly 3 million to 8 million shares of recent sessions.

That market context matters when interpreting the daily move. Newmont’s decline happened alongside a broader selloff in gold-related securities, rather than as an isolated post-earnings response. The available data does not establish what caused that group move. It does show that the report arrived after a difficult regular session for the sector, and investors should keep the timing clear when discussing the stock’s reaction.

The shares had closed at a record $135.14 on August 25 and were down 15.6% from that close by October 22, while still up 14.3% year to date. The stock was about 6% below its 50-day average of $121.85 and 1.5% above its 200-day average of $112.43. Those levels describe a market price that had retreated from its August high and was close to its longer-term average; they do not establish that either average will hold as support.

The technical readings are mixed rather than decisive. Kavout’s technical rating was 43, with the moving-average reading at 41 and the oscillator reading at 45. Some trend and volume measures remained constructive, including an uptrend classification and rising on-balance volume, while several shorter-term oscillators were overbought. In practical terms, the indicators do not erase the recent pullback or confirm a renewed advance. They offer less certainty than the company’s cost guidance, which provides a concrete forecast to test in the next quarter.

Newmont daily chart with technical signals, through the Oct 22 close

Valuation Depends on Whether Recent Cash Generation Persists

At $114.11, Newmont’s trailing P/E was 13.21, its P/FCF was 14.73, and its EV/EBITDA was 7.37. Its trailing free-cash-flow yield was 6.8%. The company also reported a 20.1% return on invested capital and a 56.7% operating margin on a trailing basis. These figures describe a business that generated substantial recent cash and operating profit, but they should not be treated as a forecast of future returns.

The limitation is especially important for a gold producer. Newmont’s third-quarter realized gold price was $4,317 per ounce, while the late-October 22 gold quote was approximately $4,045, about 6% lower. The latter is an approximate point-in-time quote, not a full-quarter average, and it does not establish what Newmont will realize in Q4. Still, it highlights the sensitivity of the current earnings and cash-flow picture: the next quarter’s forecast combines higher costs with a market gold quote below the Q3 realized price.

The trailing valuation measures also incorporate past results, including the strong third-quarter cash generation. If future costs rise and realized prices fall, earnings and free cash flow could weaken, making today’s multiples less representative. Conversely, the preliminary 2027 production outlook and continued cash generation could support the business if prices and operating performance remain favorable. The current figures do not resolve those possibilities into a precise valuation conclusion.

The useful distinction for investors is between a reported valuation and a durable one. The multiples and cash-flow yield summarize what Newmont generated over the trailing period. The Q4 cost guide and 2027 cost outlook identify risks to carrying those results forward. The lower 2026 annual guide is positive, but it does not remove that uncertainty.

Longer-Dated Projects Do Not Fix the Near-Term Cost Step-Up

Newmont’s development plans add a separate time horizon to the earnings discussion. The Red Chris block-cave full-funding decision is expected in early 2027. The estimated capital cost is $4.2 billion to $4.8 billion on a 100% basis, net of a C$500 million federal contribution. The first phase is expected to contain 3.0 million ounces of gold and 850 thousand tonnes of copper, with commercial production targeted for 2033.

Those are substantial figures, but the project’s planned production date is far beyond the Q4 cost increase and the preliminary 2027 cost outlook. Red Chris may matter to Newmont’s longer-term production and capital needs; it does not explain away the near-term operating cost forecast. Newmont has not published a project return estimate that would let readers compare the proposed investment directly with buybacks.

Other operating developments are nearer-term. Cadia produced 61 thousand ounces, up from 34 thousand in Q2 after the April seismic event. Tanami Expansion 2 commercial production has been pulled forward to the end of the first half of 2027. These developments provide evidence of a recovery at Cadia and a faster schedule at Tanami, but they should be kept distinct from the company-wide cost outlook. A mine recovery or project milestone does not by itself establish that group unit costs will decline.

The tension is therefore not simply between growth and shareholder returns. It is between cash generated now, a sizeable Q4 cost forecast, higher expected unit costs in 2027, and projects that require capital before their planned production dates. Newmont has room to pursue several priorities, but the reported buybacks do not make the development pipeline costless or remove the need to evaluate its future capital demands.

The Cost Forecast Is the Next Test of the Earnings Story

Newmont’s report offers two different signals. The completed quarter brought an adjusted EPS beat, $1.912 billion in free cash flow, and a fourth consecutive estimate beat. The company also reduced its 2026 by-product AISC and CAS guides. Those are tangible positives, not just an improvement in wording.

But the guidance for the next quarter is materially less favorable than the annual guide alone suggests. Q4 AISC of $1,900 per ounce would be about 31% above Q3, and Q4 CAS of $1,250 would be about 50% higher. Newmont attributes the increase primarily to sustaining capital and also cites inflation and oil. Its preliminary 2027 view points to unit costs trending higher, with lower Peñasquito by-product credits among the reasons.

That combination makes the cost trajectory, rather than the beat itself, the central issue to monitor. The reported cash generation and shareholder returns provide context for Newmont’s financial capacity, while the production outlook and projects provide longer-term possibilities. Neither changes the company’s own near-term cost forecast. A Q4 result near guidance would confirm that the sharp step-up was anticipated; materially higher costs, particularly alongside weaker realized gold prices, would put the recent cash-generation figures under greater pressure.

The most defensible conclusion is therefore conditional, not a buy or sell call: Newmont improved its 2026 cost outlook, but has not shown that the improvement carries into the next operating period. The evidence that would change that assessment is whether Q4 costs land near the company’s forecast and whether cash generation holds up as those costs rise.

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