The S&P/ASX 200 Index (ASX: XJO) has not had a great start to the trading week this Monday so far. At the time of writing, the ASX 200 is down 0.35% to 7,496 points. However, the same cannot be said of the Evolution Mining Ltd (ASX: EVN) share price.
Evolution Mining shares are currently up a very healthy 4.36% to $4.07 a share. That comes after this ASX gold miner closed at $3.89 a share on Friday and opened at $3.96 this morning.
So why are Evolution shares shooting so convincingly higher today when the broader market is having a pullback?
Well, there are no major news or announcements out of Evolution today, so we can rule that out.
But we do see some similar moves from many of Evolution’s gold mining peers today. The ASX’s largest gold miner Newcrest Mining Ltd (ASX: NCM) is also on the rise today, up 2.91% so far to $25.29 a share. Likewise, Northern Star Resources Ltd (ASX: NST) is up 2.36% to $9.99 a share. And Gold Road Resources Ltd (ASX: GOR) has enjoyed a 2.8% rise today to $1.29 a share.
So this is definitely a sector-wide trend we are seeing. And that points to one thing in the ASX gold mining space – the price of gold itself. Certainly, looking at the gold price, we can see a very obvious trend.
According to Bloomberg, the yellow metal is currently priced at US$1,829 an ounce. Just a few days ago, it was at US$1,815 an ounce. Around 3 weeks ago, it was at US$1,725.
That’s some significant price appreciation there and likely explains today’s bullishness in ASX gold mining shares.
Could the Evolution Mining share price be a buy today?
Such a healthy leap in the Evolution share price might be drawing some investors’ attention today. So could this ASX gold miner be a buy at current pricing?
Well, one broker who doesn’t think so is investment bank Goldman Sachs. Goldman currently rates Evolution shares as a ‘sell’ with a 12-month share price target of $3.90 a share. That implies a potential downside of more than 4% over the next year.
Goldman doesn’t rate Evolution shares at the current level due to valuation concerns. It points out that the miner is facing “higher corporate costs [and] provisions” and risks in the company’s growth plans.
At the current Evolution Mining share price, the company has a market capitalisation of $7.46 billion and a dividend yield of 2.95%.
The post Why the Evolution Mining (ASX:EVN) share price is leaping higher today appeared first on The Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen owns shares of Newcrest Mining Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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