Sell alert! Why this expert is calling time on Xero and Northern Star shares

Xero Ltd (ASX: XRO) and Northern Star Resources Ltd (ASX: NST) shares have both underperformed the 3.6% gains posted by S&P/ASX 200 Index (ASX: XJO) in 2026.

In afternoon trade on Wednesday, Xero shares are changing hands for $82.32 apiece. That sees shares in the accounting software provider down 26.6% since 2 January.

Northern Star has struggled as well.

At time of writing, shares in the ASX 200  gold stock are trading for $22.55 each, down 7.7% year to date.

Though we shouldn’t forget the fully franked 25 cent per share dividend that Northern Star paid out on 26 March. If we factor that in, then the accumulated value of Northern Star stock is down a lesser 5.4% this calendar year.

Despite the underperformance in 2026, Lazarus Capital Partners’ Tom Fairchild expects that both ASX 200 stocks could continue to struggle in the months ahead (courtesy of The Bull).

Here’s why.

Should I sell Northern Star shares today?

“The gold producer operates mines and exploration programs in Western Australia and Alaska,” Fairchild said.

Commenting on the miner’s June quarter update, released on 29 July, Fairchild noted:

The company announced total gold sales of 1.543 million ounces for full year 2026, which was above revised group guidance of 1.5 million ounces. NST disappointed investors after downgrading production guidance twice in fiscal year 2026 following weaker than expected operational performance.

Summarising his sell recommendation on Northern Star shares, Fairchild concluded:

The shares have fallen from $31.73 on March 2 to trade at $23.28 on August 13. The company’s final investment decision regarding the Hemi project is targeted for late fiscal year 2027. In our view, other gold companies appeal more at this stage of the cycle.

Northern Star is scheduled to report its audited full year FY 2026 results tomorrow, 20 August.

Time to exit Xero shares?

Atop his sell recommendation on Northern Star shares, Garipoli also recommended selling Xero shares.

“Xero is an accounting software provider,” he said.

Xero released its full year results on 14 May, with shares closing down 9.0% on the day.

Commenting on those results, Garipoli said:

The company generated revenue of NZ$2.75 billion in full year 2026, up 31% on the prior corresponding period. The company acquired Melio, a US business-to-business payments platform in June 2025 for about US$2.5 billion.

The company recently surpassed 5 million subscribers.

But with Xero shares up more than 33% since late July, Garipoli recommended taking profits.

He concluded:

Xero shares bounced off a low of $61.58 on July 24 to trade at $77.51 on August 13, 2026. However, the stock was priced at $168.78 on August 13, 2025. Justifiable investor concerns about margin pressure, artificial intelligence growth and US expansion performance have weighed on the stock and sentiment.

Investors can consider cashing in some gains.

The post Sell alert! Why this expert is calling time on Xero and Northern Star shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.