Full Year Earnings Preview:
Newcrest Mining Limited (NCM) is Australia’s leading and the world’s sixth-largest gold producer, according to the World Gold Council. NCM has its assets spread across Australia, the Pacific region, Asia, and Africa. It reports its full-year numbers on the 14th of August.
Gold has benefited enormously from the economic uncertainty created by the coronavirus pandemic as well as by the huge amount of monetary and fiscal stimulus that has undermined confidence in fiat currencies. Gold recently traded to new all-time highs near U.S$1986 and is up almost 30% year to date.
Newcrest has been a significant beneficiary of this environment and importantly its operations have remained COVID-19 free, enabling Newcrest to produce 2,1717,118 ounces of gold during FY 2020, in line with guidance.
While most companies are preserving cash due to concerns over economic uncertainty, Newcrest raised $1.1B to fund future growth at its mine sites in May. Although Newcrest traditionally pays only a modest dividend, it plays an important defensive role within portfolios. The consensus statutory EPS estimate is around 104 cents per share.
The Newcrest share price has enjoyed a strong rally from its March $20.70 low. However, it has been unable to break the trendline resistance (pictured below) coming from the November 2010 $43.70 high that also connects with the August 2019, $38.87 high.
On the downside, dips into the confluence of horizontal support $33.00/$32.00 are likely to be well supported and offer a possible buying opportunity, providing the gold price remains resilient.
Source Tradingview. The figures stated areas of the 4th of August 2020. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.