Newcrest vs Evolution Mining share prices: first-half results preview

Before Newcrest and Evolution Mining report their H1 results next week: we examine the current analyst outlook as well as look back on each miner's Q2 production results

Newcrest vs Evolution Mining share prices

As the February reporting season gets underway, we examine some of the key things investors need to know about two of Australia’s most important gold miners – Newcrest (ASX: NCM) and Evolution Mining (ASX: EVN) – before they report their half-yearly results.

Ticker

Market capitalisation

Share price

12-month price target*

Upside potential

Analyst rating*

NCM

$22 billion

$28.97

$29.91

2.8%

HOLD

EVN

$6 billion

$3.78

$4.06

7.1%

HOLD

Gold price at a glance

Gold has recorded solid gains over the last year – with the mainstay precious metal rising almost 19% in that period.

A myriad of factors has likely contributed to this run-up: US-China trade-war tensions (that now appear resolved, to some degree), historically low interest rates and coronavirus concerns.

Gold, after all, has long been viewed as a hedge against uncertainty. The world right now, particularly as it relates to the true economic impact of the coronavirus, does indeed remain uncertain.

As of 9:45 (AEDT) the gold price stood at US$1,566.58 per ounce.

Divergent price action

Mind you, even as gold prices have seen consistent gains in the last year – the price action of Newcrest Mining (ASX: NCM) and Evolution Mining (ASX: EVN) – two of Australia’s most prominent publicly listed gold miners, has proven relatively inconsistent.

In the last 12-months Newcrest has seen its share price rise a significant 17.75%. Evolution has by comparison struggled: in the last 12-months its share price has lagged the broader market and the price of gold: with its share price down ~2.86% in that period.

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Key dates

Both Newcrest and Evolution Mining are expected to report their first-half FY20 results to the market next week, on 13 February and 12 February, respectively.

Most recent quarter: a comparison

Ultimately, examining the most recent quarterly production results of both gold miners may give us insight into the recent share price divergence.

In the December quarter, for example, Newcrest reported gold production figures of 551,115 ounces. By comparison, in the September quarter the miner produced 511,636 ounces of gold. All up, this brings the company's current year-to-date FY20 production to an impressive 1,062,751 ounces.

In Q2 Newcrest recorded realised gold prices of US$1,456 per ounce.

By comparison, Evolution Mining recorded significantly lower production figures in Q2: in the December quarter the miner produced 170,890 ounces, bringing its FY20 year-to-date production figures to 362,857 ounces. In the last quarter the company reported an achieved gold price of $2,091 per ounce (or ~US$1,407 per ounce at today’s exchange rate).

The company has guided for FY20 gold production of approximately 725,000 ounces.

In looking at these figures, investors should remember the signficant size difference of both miners. In terms of market capitalisation Newcrest is ~3.6x larger than Evolution, after all.

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*12-month price targets and analyst ratings are based on average figures and taken from Bloomberg Data.

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