Newmont shorts build after earnings miss

NEM short interest jumped 12% in one week to 18.1 million shares, or 1.66% of free float, as of October 26. That reverses a month-long decline and marks the sharpest weekly build since September.

The timing follows the Q3 earnings release on October 22. The stock fell 7.1% on the day of the print. It has now lost 6.5% over the past week, broadly in line with the peer group median of -6.7%, with AEM, AU, and WPM all down 6 to 8% over the same period.

Analyst reactions diverge

Freedom Broker downgraded NEM from Buy to Hold on October 22, cutting its target 11% from $130 to $116. That brings the new target roughly in line with where the stock is trading now at $110.39.

The move contrasts with actions taken just before the print. Citigroup raised its target from $125 to $140 on October 20, maintaining its Buy. Barclays trimmed its Overweight target fractionally to $123 on October 19. Both of those targets now sit materially above the current price. The Street mean target stands at $135.60, implying roughly 23% upside from current levels.

RBC Capital holds the most optimistic target at $155 with an Outperform. Bernstein sits at $144, also Outperform. No firm has pulled a positive rating since the print.

Borrow cost and availability

Cost to borrow rose 31% over the past week to 0.45% as of October 26, with an intraday reading of 0.75% seen on October 22, the day of the earnings release. The move is notable in the context of an otherwise loose lending market. Availability remains effectively uncapped at the 9,999% ceiling, with over one billion shares available to lend. At 1.66% of float, short interest is low by any measure. The borrow cost rise reflects an increase in demand, not a shortage of supply.

What the data shows

• Short interest: 18.1 million shares, 1.66% of free float, up 12% in one week
• Short interest one month ago: roughly flat, up 0.6% over 30 days
• Cost to borrow: 0.45% as of October 26, up 31% over one week
• Share price: $110.39, down 6.5% over the past week, down 9.1% over the past month
• Street mean price target: $135.60 across recent analyst coverage
• Freedom Broker target: $116, the only post-earnings downgrade on record
• Availability: above 1 billion shares lendable, borrow market effectively unconstrained
• Options put/call ratio: 0.78, a z-score of 0.29 against the 20-day mean, near the middle of the past year's range