New Gold to Report Q2 Earnings: Buy, Sell or Hold the Stock?
New Gold NGD is set to report second-quarter 2025 results on July 28, after market close.The Zacks Consensus Estimate for NGD’s earnings per share for the quarter has remained unchanged at 10 cents over the past 60 days. The estimate indicates a significant 400% jump from the year-ago quarter’s earnings per share of two cents.Image Source: Zacks Investment ResearchNew Gold’s Earnings Surprise HistoryNew Gold’s bottom line beat the Zacks Consensus Estimate in each of the trailing four quarters. Over the period, the company has recorded an average surprise of 79.2%.Image Source: Zacks Investment ResearchWhat the Zacks Model Unveils for New GoldOur proven model does not conclusively predict an earnings beat for New Gold this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.Earnings ESP: The Earnings ESP for NGD is 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.Zacks Rank: New Gold currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Likely to Have Shaped NGD’s Q2 PerformanceIn the April-June 2025 period, gold prices averaged around $3.301.42 per ounce, marking a 41% year-over-year increase. Tariff threats, financial uncertainty, geopolitical tensions and solid demand from central banks boosted gold prices. Prices had even reached the $3,500 per-ounce mark for the first time. Copper prices also demonstrated strength and the average price was up 5% year over year. We expect the rally in copper and gold prices to have reflected in New Gold’s top-line performance in the second quarter. For 2025, New Gold expects consolidated gold production at 325,000-365,000 ounces, reflecting a 16% increase year over year. The company had earlier stated that production is expected to strengthen in the second half of the year, with the first half of 2025 representing approximately 38% of the annual projection and the first quarter representing approximately 14%. In the first quarter of 2025, New Gold produced 52,186 ounces of gold, which represented approximately 15% of the yearly projected total (higher than its targeted 14%). It was, however, lower than the year-ago consolidated production of 70,898 gold ounces. The decline reflected the significant waste stripping at Rainy River in the first quarter of 2025. Output at New Afton increased over the prior-year period due to higher tons processed, partially offset by lower grade and recovery.For the second quarter, we expect total gold production to range between 71,314 ounces and 86,514 ounces. Compared with the 68,598 ounces produced in the second quarter of 2024, this suggests growth of 4-26%.Rainy River gold production is projected at 265,000 – 295,000 ounces for 2025, highlighting an increase of 20% from the prior year. The company expects 37% of the production in the first half. Considering the 33,908 ounces of gold produced, this suggests a second-quarter gold production of 64,142-75,242 ounces. Compared with the year-ago output of 50,298 ounces, year-over-year growth of 28-50% is projected for the mine for the second quarter of 2025.New Afton’s 2025 gold output is expected at 60,000 – 70,000 ounces. With the company expecting 45% of this production in the first half and taking the first-quarter production into account, this suggests a production range of 8,722-13,222 ounces for the second quarter. The mine had produced 18,300 ounces of gold in the second quarter of 2024. Copper production in 2025 is expected to be in line with 2024 at 50-60 million pounds as the increased throughput from C-Zone at New Afton is offset by lower grades from the remaining life of the B3 cave.Copper production is expected to strengthen in the second half of the year, with first-half production expected at 43% of the 2025 total. In the first quarter, NGD produced 13.6 million pounds, surpassing its target of 20%. This suggests copper production at 7.9-12.2 million pounds for the second quarter. The company had produced 13.6 million pounds of copper in the second quarter of 2024.All-in sustaining costs (AISC) are expected at $1,025-$1,125 per ounce in 2025, a 17% decrease at the midpoint. This will be due to higher production and lower operating costs from the New Afton C-Zone crusher and conveyor system, and the decrease in the Rainy River Phase 4 strip ratio. Total cash costs per gold ounce sold are likely to be in the range of $600 - $700. Total costs are expected to decrease quarter over quarter throughout 2025 due to increasing production and a lower strip ratio at Rainy River in the second half of 2025. With costs expected to decrease in the second half with increasing production, we expect AISC per gold ounce sold in the second quarter of 2025 to be higher than the reported figure of $1,381 per ounce in the first quarter of 2024. Likewise, cash costs per gold ounce sold are expected to be higher than $740 per ounce in the second quarter of 2024. Overall, New Gold’s second-quarter results are expected to reflect improved gold and copper prices and higher gold production, offset by higher costs.Higher gold prices are expected to reflect on the upcoming earnings releases of other stocks such as Kinross Gold Corporation KGC and Agnico Eagle Mines AEM as well. Kinross Gold is expected to report a 107% increase in second-quarter earnings while Agnico Eagle Mines is expected to see a 57% rise.NGD’s Price Performance & ValuationNew Gold stock has surged 76.6% so far this year compared with the industry’s 57.3% growth. The company has also outscored major gold miners like Kinross Gold and Agnico Eagle Mines, which have gained 72% and 60.6%, respectively. Image Source: Zacks Investment ResearchNew Gold is currently trading at a forward price/sales of 2.19X compared with the industry's 3.39X. The company is also cheaper than Kinross Gold and Agnico Eagle Mines, which are trading at forward price/sales of 3.17X and 6.03X, respectively.Image Source: Zacks Investment ResearchInvestment Thesis on New GoldThe company recently consolidated its interest in the New Afton mine to 100%, increasing its future free cash flow. NGD has a solid production profile with gold output projected to grow 38% between 2024 and 2027. This will be driven by increasing production profiles at both Rainy River and New Afton as growth projects are completed and ramped up in the near term. Copper output will see a 94% increase over the next three years. Backed by its cost management efforts, the company is expected to see a 65% reduction in AISC over the next three years, which is commendable.Gold prices have gained 29% year to date and are currently at $3,367 per ounce, and demand has been strong. The favorable environment for gold presents a promising outlook for NGD.Should You Buy NGD Stock Right Now?While an earnings beat may be uncertain in the quarter under review, New Gold seems set to deliver improved results, supported by the uptrend in gold prices and anticipated higher gold production. Given its attractive valuation, investing in NGD stock ahead of its earnings announcement offers a promising opportunity.New Gold’s solid production and lower cost profile make it a top stock for investors seeking exposure to gold.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kinross Gold Corporation (KGC): Free Stock Analysis Report Agnico Eagle Mines Limited (AEM): Free Stock Analysis Report New Gold Inc. (NGD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
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