The Northern Star share price is down 25% from its April high. Is now the time to buy?

Two miners examine things they have taken out the ground.Two miners examine things they have taken out the ground.

The Northern Star Resources Ltd (ASX: NST) share price is tumbling again on Thursday, down 2.52% to $8.51 in late afternoon trade.

This means the gold miner’s shares are now down more than 25% from their April high of $11.59.

Furthermore, investors have also hit the sell button on Northern Star’s peers in the past couple of months.

For context, Newcrest Mining Ltd (ASX: NCM) shares have dropped 17% from their top of $28.96 in April. 

And the Evolution Mining Ltd (ASX: EVN) share price is in the red by 23% from its nine-month high of $4.68 in April.

What’s dragging Northern Star shares to near multi-year lows?

Investor confidence has been waning in recent times following a raft of unfavourable macro environmental factors.

First and foremost, the price of gold has deteriorated to around US$1,850 per ounce. This represents a decline of 6.3% since 18 April – around the time when Northern Star shares were hitting monthly highs.

Despite the price of the yellow metal staying relatively stable for now, the Northern Star share price is continuing to be impacted.

The decision by the Reserve Bank of Australia to lift interest rates also likely had a negative effect on the gold sector.

In times of rate hikes, investors tend to shift their focus away from gold and into government bonds.

On Friday, the United States consumer price index for May will be released, which will provide crucial data on whether inflation has peaked.

Depending on the report, it’s anyone’s guess if the Federal Reserve will be more aggressive with its monetary policy.

With Northern Star shares falling, is this a buying opportunity?

A couple of brokers put out their thoughts on the Northern Star share price late last month.

As reported by ANZ Share Investing, Credit Suisse raised its 12-month price target on the company’s shares by 4.5% to $11.50.

It appears the broker is bullish on Northern Star and believes it is significantly undervalued.

Based on the current share price, this represents an upside of around 35%.

On the other hand, UBS cut its rating by 0.8% to $11.70. It, too, thinks Northern Star shares have a huge upswing.

Share price snapshot

The Northern Star share price is down 22% over the past 12 months.

It is also trading 9% lower this year to date and is 10% down over the past month.

On valuation grounds, Northern Star commands a market capitalisation of approximately $9.94 billion.

The post The Northern Star share price is down 25% from its April high. Is now the time to buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources 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 Scott Phillips.

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