Gold has fallen in value by about 25% since its January highs, but that doesn't mean there aren't bargains to be had among the Australian gold producers.
Here are the ones Morgans has a buy rating on.
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Newmont Mining Ltd (ASX: NEM)
Morgans said the world's largest gold producer offers "unmatched tier-1 asset diversification", free cash flow of about 15%, and an ongoing US$6 billion buyback.
They added:
A defensive, high-quality gold exposure for investors in a volatile market.
They have a price target of $198 for Newmont shares compared to $134.18 currently.
Northern Star Resources Ltd (ASX: NST)
This company has a "compelling medium to long-term growth story" and trades at a material discount to net asset value, Morgans said.
However, a push for a breakup of the company by activist investor Elliott and the ongoing search for a new managing director inject some uncertainty.
Morgans added:
A potential sale process represents the clearest catalyst for immediate upside.
They have a price target of $26 on the company compared to $18.86 currently.
Evolution Mining Ltd (ASX: EVN)
This is Morgans' preferred large-cap pick, "combining low-cost operating base, consistent execution, net cash balance sheet and meaningful copper exposure''.
Morgans said recent sector weakness provides a compelling entry point.
They have a price target of $15 on the company compared to $11.62 currently.
Ramelius Resources Ltd (ASX: RMS)
Morgans rates Ramelius as a high-quality, low-cost producer, "with one of the strongest medium-term production growth profiles in the sector''.
They added:
The recent pullback provides an attractive entry point into a disciplined management team with a robust balance sheet.
They have a price target of $5.80 on the company compared to $2.92 currently.
Regis Resources Ltd (ASX: RRL)
Regis, Morgans said, provides direct, unhedged leverage to the gold price through a portfolio of strong, cash-generative assets.
Morgans has a price target of $9.39 on Regis compared to $5.93 currently.
Catalyst Metals Ltd (ASX: CYL)
Morgans said this company has a "compelling mid-cap growth story underpinned by production expansion at Plutonic and the high-grade Trident development''.
They added:
We see recent sector weakness as an attractive opportunity to accumulate in this value name.
Morgans has a price target of $13.58 on the company compared to $4.89 currently.
Where to from here for the gold price?
Morgans has reduced its forecast for the gold price for the remainder of the year, reducing it from US$4750 per ounce to US$4250 per ounce.
The current spot price of gold is US$3994.53.
