Can the St Barbara share price recover its losses in 2022?

Is there hope for the St Barbara share price this year?

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Key points

  • St Barbara shares hit a 52-week low of $1.0775 yesterday but slightly recovered during afternoon trade
  • High inflationary numbers, along with possible rate hikes, are weighing down the company's shares
  • However, Macquarie remains bullish on the gold miner's shares with a price target of $1.70 per share

The St Barbara Ltd (ASX: SBM) share price tanked to a 52-week low of $1.0775 yesterday.

This is a sharp contrast to when the gold miner’s shares reached a year-to-date high of $1.64 on 14 March.

However, after heavy falls on the ASX on Tuesday, St Barbara shares closed 1.30% lower to $1.135.

What happened to St Barbara shares?

The general market sentiment remains negative amid sky-high inflation and possible bigger rate hikes.

St Barbara shares have been caught up in the whirlwind along with other gold resource companies.

As such, Northern Star Resources Ltd (ASX: NST) shares touched a multi-year low of $7.69 yesterday.

On the other hand, shares in Australia’s largest gold miner Newcrest Mining Ltd (ASX: NCM) are down almost 5% in a week.

In addition, the price of gold has tumbled 3.5% from last Friday to US$1,810 per ounce at the time of writing. This is because investors are shifting their assets from gold to government bonds as the yields become more attractive.

Nonetheless, this could weigh on St Barbara’s margins as gold losses its value.

Can St Barbara shares make a comeback?

According to ANZ Share Investing, one broker gave its take on the St Barbara share price in early May.

Following the company’s third-quarter results, Macquarie slashed its price target by 6% to $1.70 per share. This represents an upside of close to 50% based on the current share price.

The broker believes the St Barbara share price is significantly undervalued at this point in time.

About the St Barbara share price

Over the past 12 months, the St Barbara share price has dropped by 39%.

Year to date, its shares are down 22%.

St Barbara has a price-to-earnings (P/E) ratio of 8.76 and commands a market capitalisation of roughly $925.86 million.

Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources Limited. 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 Scott Phillips.

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