The gold sector may have delivered stunning returns this year, but that doesn't mean it is too late to get on board the gold train.
In fact, one of the biggest and best ASX 200 gold stocks on the Australian share market could be cheap according to one leading broker.
Which ASX 200 gold stock?
The gold stock that is being tipped as a buy by the team at Bell Potter is Northern Star Resources Ltd (ASX: NST).
It is a $35 billion gold miner with three production centres, operating in world class locations of Western Australia and Alaska.
Bell Potter has resumed coverage on the ASX 200 gold stock and highlights that it is a stable and low-risk gold producer which is well-positioned to achieve its guidance in FY 2026. It said:
We see NST as a stable, low-risk gold producer entering a phase of free-cash-flow harvesting in FY27 following the A$1.5bn investment in the KCGM mill expansion (from 12Mtpa to 27Mtpa). We anticipate production growth of ~10% over FY26, primarily due to a forecast milled grade increase at KCGM, (~1.6g/t vs 1.3g/t in FY25) as higher-grade zones are mined. The higher grades alone will get NST to the bottom end of FY26 guidance, an increase in throughput also required to reach the upper end.
Bell Potter also notes that the company is at an inflection point with its free cash flow. As a result, it believes that Northern Star's shares deserve to trade at a premium to peers. The broker adds:
NST screens as fairly priced (7.7x NTM EV/EBITDA, five-year average 6.1x and peer group average 8.7x domestic 6.6x international) when compared with peers. However, we believe 7.7x today for a globally diversified gold producer, at the end of heavy capital investment in a rising gold price environment looks cheap in the context of a longer-term outlook.
NST is entering a period of cash flow harvesting in FY27, underpinned by the growth capital expansion at KCGM and investment in optimisation across the portfolio. The hedge-book will limit margin expansion over the next 12 months. However, as production begins to increase, so does to the leverage to underlying prices.
Time to buy
According to the note, the broker has resumed coverage on the ASX 200 gold share with a buy rating and improved price target of $30.00 (from $20.85).
Based on its current share price of $24.77, this implies potential upside of 21% for investors over the next 12 months.
In addition, the broker is forecasting a 2% dividend yield in FY 2026, boosting the total potential return to 23%.
Commenting on its buy recommendation, Bell Potter said:
We recommence coverage on NST with a Buy recommendation and a $30.00/sh target price. NST's portfolio of high-quality producing assets underpins our investment case and sum-of-the-parts valuation, which utilises a Base-case (70% – BPe Gold price deck and production outlook) and a Bull-case (30% – US$4,500/oz Au price) scenario. We believe NST will enter a cashflow inflection period over the coming ~2 years, underpinned by strong Australian dollar gold prices, which will drive shareholder returns higher.
