Shares of Northern Star Resources Ltd (ASX: NST) have lagged key benchmarks in 2022 and now trade 7% down this year to date.
After nudging past 52-week highs in April, traders unloaded shares from a peak of $11.48 with prices levelling to $8.50 by 12 May. They currently fetch $8.72 apiece.
Similarly, gold and gold bullion has endured a similar path after blowing off highs of more than US$2,052 per troy ounce in March.
Sentiment tilted bullish with Northern Star
Coverage of Northern Star from analysts is tilted to the bulls according to Bloomberg data. However, analysts at Argonaut Securities urge clients to sell their position, valuing the company at $7.60 per share.
The consensus price target is $12.59 from this list, with Canaccord Genuity holding the highest valuation at $15.15 per share.
In its assessment, the team at JP Morgan was constructive on the company’s balance sheet and noted it “is generating solid FCF at current gold prices”.
“The company is focused on three production hubs – Kalgoorlie and Yandal in Australia, and Pogo in Alaska,” the JP Morgan team wrote.
“The company has a track record of project delivery and strong production growth. We have an Overweight rating, based on valuation [$11 per share].”
Meanwhile, gold appears to remain under pressure amid a strengthening US Dollar and the curling up of US Treasury yields.
Moreover, the outlook for interest rates and the dollar still present major headwinds for gold bullion, per Trading Economics, “as investors continue to speculate on how aggressive monetary tightening will need to be to fight inflation.”
The dispersion in performance from key assets traditionally viewed to fight inflation in investor portfolios are plotted below. Curiously, gold and gold miners like Northern Star are down over the last few months, with a key divergence in late April. Whereas the US Dollar index (DXY) has climbed steadily. Even more curious, is the performance of the Russian Ruble against the US Dollar (RUB/USD).
Northern Star share price snapshot
In the last 12 months, the Northern Star share price has slipped more than 23% into the red and is down more than 7% this year to date.
Losses have extended into the past month of trade with shares sliding another 11% in that time.