Is the Evolution share price a buy after falling 40% this year?

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this yearA young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year

This year has been rough on the Evolution Mining Ltd (ASX: EVN) share price. The S&P/ASX 200 Index (ASX: XJO) gold producer’s stock was rocked in late June when the company downgraded its production guidance while upping its expected production costs. And a falling gold price hasn’t helped at all.

At the time of writing, the Evolution share price is $2.40. That’s 41% lower than it was at the start of the year.

Comparatively, the ASX 200 has slumped around 10% in that time while the VanEck Gold Miners ETF (ASX: GDX) has shed 15%.

But has the Evolution share price’s poor performance presented a buying opportunity? Let’s see what experts are saying.

Is the embattled Evolution share price a buy?

The Evolution share price has been recently battered by an earnings downgrade and a falling gold price.

While the yellow metal is often spruiked as an inflation hedge, it doesn’t pay interest. That means rising rates may have encouraged investors to move away from gold. At the same time, a stronger US dollar makes the metal more expensive for those trading in other currencies, as my Fool colleague Zach Bristow reported last week.

But is there light at the end of the tunnel for the Evolution share price? Well, that depends on who you ask.

Atlas Funds Management chief investment officer Hugh Dive is reportedly bullish on Evolution – just. The fundie told Livewire it’s a “very soft buy” in his books, adding:

Evolution’s production issues are not insurmountable. The gold price could go up, and if they get their production back together, its [share price will] go up.

The publication also heard the far more bearish opinion of Investors Mutual Limited’s Hugh Giddy. Giddy believes the stock is a ‘hold’ amid negative sentiment on the price of gold.

And there appears to be mixed opinions all round. The Motley Fool Australia reported on brokers’ outlooks for the Evolution share price earlier this month.

Then, seven brokers believed the stock was a buy, eight had slapped it with a ‘hold’ rating, and two were tipping it as a ‘sell’.

However, the consensus price target was $3.30 – representing a potential 44% upside.

The post Is the Evolution share price a buy after falling 40% this year? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 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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