Northern Star Resources Ltd (ASX: NST) shares are under pressure today, sliding around 2.2% to about $24.80. This comes as traders digest weaker operational news and lowered expectations.
Over the past month the stock is down more than 7%, reversing some of last year's strong gains.
So, why is this top-tier gold producer losing ground while gold prices remain strong?
Let's take a closer look.
Image source: Getty Images
Softer production update weighs on sentiment
The main reason for today's sell-off appears to be Northern Star's recent operational update, released earlier this month.
In the December quarter, the company sold around 348,000 ounces of gold, taking first half FY26 gold sales to roughly 729,000 ounces. That result came in below what many analysts had been expecting.
More importantly, Northern Star cut its full year FY26 production guidance. The company now expects to produce 1.6 to 1.7 million ounces, down from its previous guidance range of 1.7 to 1.85 million ounces.
Management pointed to a series of operational challenges behind the downgrade.
What went wrong at key sites?
Several assets experienced issues during the quarter.
At the Kalgoorlie Super Pit, a crusher failure caused about four weeks of lost throughput. This reduced processing volumes and delayed gold production.
At the Pogo mine in Alaska, lower grades and higher dilution impacted output. There were also pockets of unplanned downtime across other operations, including Yandal.
Broker views turn more cautious
Broker sentiment has clearly cooled following Northern Star's recent production downgrade.
Following Northern Star's operational update, several major brokers have cut their price targets and adjusted their recommendations.
Morgan Stanley reduced its price target by 5.1% to $26.00 per share and downgraded the stock to 'hold', signalling concerns around near-term production reliability and cost pressures.
Macquarie also trimmed its valuation, lowering its price target by 3% to $31.00 per share. While the broker remains optimistic about the longer-term outlook, it flagged execution risks across key assets following recent operational disruptions.
Meanwhile, Citi cut its price target by 2.1% to $27.50 per share, reflecting lower gold sales volumes and the impact of reduced FY26 guidance. Citi's commentary suggested costs may remain elevated until production stability improves.
Jefferies went against the trend slightly, lifting its price target by 6.1% to $31.00 per share. However, the broker warned investors may remain cautious until Northern Star delivers more reliable and consistent quarterly results.
Gold prices help, but nerves remain
Gold prices remain near record highs, which continues to support earnings across the sector. In theory, this should be positive for Northern Star.
However, today's move shows that operational performance still matters more than gold prices in the short term.
Looking ahead, investors will be watching the company's interim results to be released next month. Any improvement in production stability or cost control could help the share price find support.
