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Jefferies says gold stock Newmont is overvalued

Crushed stones and mined soil are deposited in a pile before being processed at Newmont Mining's Yanacocha gold mine in Cajamarca, Peru, Oct. 21, 2015.
Dado Galdieri | Bloomberg | Getty Images

Investors should avoid shares of Newmont Mining, which are up more than 80 percent this year, as the company faces numerous challenges, Jefferies told clients on Thursday.

"We downgrade NEM shares from Buy to Hold due to near-term gold price risk, the headwind of potential U.S. interest rate increases, a lack of positive catalysts, and valuation following strong share price performance YTD," equity analyst Christopher LaFemina wrote.