The Northern Star Resources Ltd (ASX: NST) share price has come under selling pressure in recent weeks.
On Monday, Northern Star shares finished at $17.21, down 6.97% for the session. This leaves the stock down more than 20% over the past week and roughly 40% over the past month.
The decline follows a combination of company-specific issues and weakness in the gold price.
Let's take a closer look at what has been driving the sell-off.
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Guidance downgrade shakes confidence
The initial move lower came after Northern Star released an operational update earlier this month.
In that update, the company revised its FY26 production outlook toward the lower end of its guidance range. Management flagged a weaker than expected performance across several key operations.
At KCGM, milling performance was below expectations, while mining productivity at Jundee also disappointed the market. These issues weighed on output and raised concerns about execution risk.
Gold sales for January and February totalled approximately 220,000 ounces. Open pit grades at KCGM averaged around 1.6 grams per tonne, which was below expectations.
The company also noted that performance at KCGM remains dependent on the existing mill, which is not running consistently.
While the Northern Star still expects to produce more than 1.5 million ounces for FY26, the downgrade has reset investor expectations.
Gold price weakness adds further pressure
The second driver of the sell-off has been the pullback in the gold price.
According to recent data, gold is now trading at approximately US$4,237 per ounce, down around 5% in the latest session. Over the past month, it has also fallen from recent highs.
Moves in the gold price directly impact Northern Star's revenue and margins.
A lower realised gold price reduces cash flow, particularly when combined with operational challenges. This points to a weaker earnings outlook in the near-term.
The timing of the gold price decline has added to the impact of the downgrade, accelerating the fall in the share price.
Brokers cut targets as sentiment turns
The change in outlook has also been reflected in recent broker updates.
Following the downgrade, several investment banks have reduced their price targets, reflecting lower earnings expectations.
Recent revisions include Ord Minnett cutting its target to $23.70, Morgans to $30, Canaccord to $28.40, Macquarie to $25, and Jefferies to $33 per share.
Keep in mind, these targets are well above the current Northern Star share price.
Foolish takeaway
Northern Star shares have fallen sharply in recent weeks, with the stock now trading near the lower end of its recent range.
The company is still expected to deliver more than 1.5 million ounces of production in FY26, but recent updates point to ongoing challenges.
At the same time, changes in the gold price are adding another layer of pressure.
From here, attention is likely to be focused on the company's upcoming production updates and operating performance.
