Are these ASX 200 gold miner shares buys?

Should you be buying these gold miners?

| More on:
rising gold share price with with an arrow and word gold

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you’re looking for exposure to the gold sector, then you may be looking at the shares listed below.

Following their recent quarterly updates, a leading broker has been running the rule over them to see if there’s an investment opportunity.

Here’s what it thinks about these ASX 200 gold miners:

Evolution Mining Ltd (ASX: EVN)

According to a note out of Goldman Sachs, its analysts have downgraded this gold miner’s shares to a sell rating with a $3.90 price target. This compares to the latest Evolution share price of $4.07.

Goldman wasn’t impressed with its quarterly update, noting that it fell short of expectations with production and its costs were higher.

The broker said: “We downgrade EVN to Sell, with the stock trading at a premium to other gold names across our coverage (1.1xNAV, 7.0xEBITDA) despite the underwhelming near-term outlook and a growth profile largely concentrated in two key projects.”

Newcrest Mining Ltd (ASX: NCM)

Goldman Sachs is much more positive on Newcrest and has put a buy rating and $35.00 price target on its shares. This compares to the current Newcrest share price of $26.18. This follows a quarterly update that was in line with the broker’s expectations.

Goldman said: “We continue to expect that updates on key projects over the remainder of 2021 will de-risk the company’s value-accretive project pipeline, and retain our Buy rating with NCM trading at 0.74xNAV.”

Northern Star Resources Ltd (ASX: NST)

The broker notes that Northern Star outperformed its expectations with both its production and costs in the June quarter. This led to the gold miner comfortably achieving its full year guidance. In light of this, its growth options, and attractive valuation, the broker thinks its shares are in the buy zone. Goldman has a buy rating and $13.10 price target on its shares. This compares to the latest Northern Star share price of $10.76.

It explained: “Growth capex was ~A$500mn higher in total over the next three years vs. our prior estimates, but is expected to deliver a production profile broadly in line with our prior forecasts, after accounting for the divestment of Kundana included in guidance. We retain our Buy rating, with NST trading at 0.82xNAV despite offering high-returning organic growth.”

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Gold

rising gold share price represented by a green arrow on piles of gold block
Gold

Why is the Evolution share price up 13% in a month?

Evolution Mining shares have been continuing to tread higher in August.

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Gold

Why is ASX 200 gold share St Barbara sliding 10% today?

St Barbara is currently the worst performer among ASX 200 shares today.

Read more »

A woman blowing gold glitter out of her hands with a joyous smile on her face.
Share Gainers

Guess which ASX mining share is rocketing 30% on a ‘significant new discovery’

Meeka Metals has set off in vertical fashion today.

Read more »

Gold nuggets with a share price chart.
Gold

Down 20% so far in 2022, is the Newcrest share price a bargain buy or a falling knife?

Newcrest may or may not be at a turning point.

Read more »

gold, gold miner, gold discovery, gold nugget, gold price,
Gold

3 ASX gold shares surging ahead on Friday

It's a good day on the ASX for gold shares.

Read more »

rising gold share price represented by a green arrow on piles of gold block
Gold

ASX gold share Peregrine explodes 60% on ‘spectacular’ new find

Gold shares are in the money on Friday.

Read more »

a woman wearing a sparkly strapless dress leans on a neat stack of six gold bars as she smiles and looks to the side as though she is very happy and protective of her stash. She also has gold fingernails and gold glitter pieces affixed to her cheeks.
Gold

When will Firefinch shares resume trading?

Firefinch shares won't be back online until the company finalises its funding proposal. Here's how long the gold miner thinks…

Read more »

A man standing in a red rock mine is covered by a sheet of gold blowing in the wind.
Gold

What’s the outlook for the gold price in FY23?

We check what's impacting gold prices in the current climate.

Read more »