Westgold Resources Ltd (ASX: WGX) is an S&P/ASX 200 Index (ASX: XJO) gold share that is well-liked by analysts.
This business is a West Australian underground gold miner. It's predicted to deliver large returns based on analyst price targets, which is where analysts think the share price will be trading in 12 months from now.
According to CMC Markets, of five recent analyst ratings on the business (all of them buys), the average price target on the business is $9.22, suggesting a possible rise of more than 50% from where it is at the time of writing.
A leading fund manager, L1 Group Ltd (ASX: L1G), has outlined a number of positives about the business that could make it significantly undervalued.
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Why the ASX 200 gold share is an appealing buy
For starters, the Westgold share price is now 25% cheaper than it was on 2 March 2026, as the chart below shows. It can be good to look at resource shares when they suffer declines.
L1 noted that the gold price fell by around 12% in March, which defied typical resilience during geopolitical shocks. The fund manager noted significant selling with large-scale profit-taking. L1 highlighted that Turkey sold around 120 tonnes, or US$20 billion, of gold.
The investment team suggested that the valuation of gold miners remain "compelling" despite the recent decline in the gold price, with key positions trading at a price/earnings (P/E) ratio of less than six at the current gold price. L1 suggested that this allows for a "significant margin of safety over future gold price moves and cost inflation".
The fund manager said that these are historically low valuations in the gold sector.
What makes Westgold shares a buy?
Specifically on Westgold, L1 likes that the business is transforming its portfolio to a "greater scale and quality".
L1 noted that the ASX 200 gold share is expected to increase production by almost 50% by FY28 to 470,000 ounces, with scope to grow further beyond that.
The fund manager said there's "further material upside" from the recently discovered Fletcher Zone.
Plus, the company has a significant net cash balance sheet and it's unhedged to the gold price.
In terms of the valuation, L1 said that the ASX 200 gold share is trading on a 2027 P/E ratio of around five.
The fund manager believes the long-term drivers of the gold price will remain supportive, including central bank buying, fiscal deficits and elevated geopolitical risks.
