Broker says the Northern Star share price weakness could be a golden opportunity

Northern Star could be a gold share to buy…

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The Northern Star Resources Ltd (ASX: NST) share price has been having a tough time in 2022.

Since the start of the year, the gold mining giant’s shares have lost 14% of their value.

Where next for the Northern Star share price?

The good news for investors is that one leading broker believes the Northern Star share price could be heading a lot higher from current levels.

According to a recent note out of Citi, the broker has retained its buy rating with a trimmed price target of $12.10.

Based on the current Northern Star share price of $8.10, this implies potential upside of almost 50% for investors over the next 12 months.

In addition, the broker is forecasting fully franked dividend yields of 2.8% in FY 2022 and 3.5% in FY 2023.

What did the broker say?

Although Citi has reduced its gold price forecasts, it still sees the price of the precious metal remaining elevated for some time to come. In light of this, the broker appears to see recent weakness in the Northern Star share price as a golden opportunity for investors.

It commented:

We’ve trimmed our gold price in FY22/23e. “Push and Pull” frictions can keep average prices elevated, but with upward momentum lagging. On a 6-12m view we now see gold trading at US$1775/oz vs spot US$1853/oz.

We also update for the May reserve and resource update. Key changes are a lower grade at the Thunderbox underground and reduced open cut material at Jundee from Orelia vs prior Echo numbers. EBITDA reduces by 1/8/6% in FY22/23/24e. Our NAV is now A$10.35sh. Our TP reduces to A$12.10/sh on the lower earnings. Next catalyst is the KCGM mill expansion mid-year. We remain at Buy.

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 Scott Phillips.

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