The Northern Star Resources Ltd (ASX: NST) share price has started the week strongly.

The gold miner rose 6.5% to $23.55 on Monday following news of a rejected takeover approach from Gold Fields.

But putting that excitement to one side, does the Northern Star share price look cheap based on what the business could earn over the next few years?

I think it does.

The valuation gets cheaper

On FY27 numbers alone, I would describe Northern Star as reasonably priced rather than obviously cheap.

Consensus forecasts point to earnings per share (EPS) of $1.35 in FY27. At $24.02, that puts the shares on a forward PE ratio of around 18 times.

That is not demanding, but it is what comes next that really catches my attention.

Northern Star’s EPS is expected to jump to $2.41 in FY28 and then $3.30 in FY29.

If those forecasts prove accurate, today’s share price represents less than 10 times FY28 earnings and only around 7 times FY29 earnings.

For a major gold producer, I think those multiples look cheap.

The dividend outlook also improves alongside earnings. Consensus estimates point to dividends per share of 51.6 cents in FY27, 73 cents in FY28, and 86.2 cents in FY29.

At the current Northern Star share price, that would see the dividend yield rise from a little over 2% in FY27 to around 3.6% by FY29.

Gold will decide how cheap Northern Star really is

There is an obvious catch.

Gold miners do not control the price of what they sell, so those earnings forecasts will depend heavily on where gold trades over the next few years.

Right now, gold is around US$4,268 an ounce.

A note out of Bell Potter shows that it is forecasting US$4,875 an ounce in 2027 and US$4,900 in 2028, before easing to US$4,607 in 2029.

If gold remains around those elevated levels, it is easier to see how Northern Star could generate the sharp earnings growth analysts currently expect.

But the reverse is also true.

A material fall in the gold price, potentially driven by higher interest rates or changing investor demand, could pull earnings estimates lower and make today’s apparently cheap forward multiples much less meaningful.

That is why I would not look at the 7 times FY29 PE ratio in isolation. It is attractive, but there is more uncertainty attached to it than there would be for a business with greater control over its selling prices.

Foolish takeaway

For investors looking for gold exposure, I think the Northern Star share price looks like a cheap buy at around $23.

There is plenty riding on the gold price, so I would expect the investment case to move with it. But with Northern Star potentially earning more than $3 per share by FY29, I think the current price justifies taking that commodity risk.

The post Is the Northern Star share price a cheap buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Northern Star Resources. 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.

Future Generation Global Ltd (ASX: FGG) shares look like they could be one of the top picks for retirees in FY27 and beyond.

The business is a listed investment company (LIC), which means it invests in other assets and shares on behalf of shareholders.

I’m going to run through what makes it such an attractive pick right now.

Excellent diversification

The business is invested in 15 different global fund managers, including Antipodes, Yarra Capital Management, Muncro, Halowesko Partners, Vinva, WCM, Cooper Investors, Life Cycl, GCQ, Ellerston Capital, Paradice, Fairlight and Morphic.

By being invested in so many fund managers, Future Generation Global is providing significant diversification. For starters it gives access to multiple investment styles, including ‘long’, ‘absolute bias’ and ‘quantitative’.

Those portfolios give more exposure to medium-sized global businesses and a lot more exposure to small companies.

I also like how the Future Generation Global portfolio gives global exposure across multiple markets including North America, the UK, Europe, Asia, other developed markets and emerging markets.

I think this is a really effective pick for retirees partially because of the huge amount of diversification that it can provide our portfolios with, which retiree portfolios may not otherwise have.

But, as a pleasing bonus, Future Generation Global gives diversification and a strong level of passive income.

As a bonus, it’s supporting a number of organisations include BackTrack, Big Hart, Prevention United, Project Rockit, Reach Out, Smiling Mind, Human Nature, I Can, Westerman Jilya Institute, Live 4 Life and WANTA Aboriginal Corporation.

Great dividends

There are not many businesses on the ASX that have increased their payout every year for the past eight years in a row.

There are plenty of ASX blue-chips that have cut their dividends this decade, whether that’s BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Woolworths Group Ltd (ASX: WOW), Woodside Energy Group Ltd (ASX: WDS) or Fortescue Ltd (ASX: FMG).

Future Generation Global has given investors steady growth in the dividend, which makes it an appealing choice for passive income for retirees.

The business has provided guidance that it will grow its FY26 annual dividend by 5% compared to the FY25 payout.

At the time of writing, an annual payout of 8.4 cents per share translates into a dividend yield of 5.1% excluding franking credits and 7.3% including franking credits.

When you put all those elements together, I think they can create a strong mix of positives for retiree portfolios, including the appealing philanthropy.

The post Why Future Generation Global shares are a retiree’s dream for FY27 appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Global. 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 recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Brokers have released new research reports on three very different companies this week, but the common thread is a forecast of solid share price appreciation.

Let’s see who the brokers like.

Alliance Aviation Services Ltd (ASX: AQZ)

Morgans has belatedly run the ruler over Alliance’s FY26 results and has increased their price target on the company as a result.

The broker said the company achieved its FY26 guidance despite a mixed set of numbers, including second-half revenue coming in $19 million below their expectations.

This was due to weaker-than-expected wet lease revenue, partially offset by a strong performance from contracts, with contract revenue 9% ahead of Morgans’ estimates.

Looking forward, Alliance has resigned its largest wet lease contract, securing more favourable terms.

Morgans said:

While the fleet commitment reduces from 30 to 23 aircraft through FY27, AQZ expects materially improved profitability, margins and cash generation from the revised contract.

The broker said the company’s strategic reset had “materially improved the investment case”.

They added:

The renegotiation of its largest wet lease contract, fleet transition and renewed focus on balance sheet repair provide a clearer pathway to improved profitability, cash flow generation and deleveraging over the next 12-24 months. That said, FY27 remains a critical execution year. Delivery of margin guidance, restructuring benefits, fleet optimisation initiatives and leverage targets will be key to rebuilding investor confidence and supporting share price appreciation.

Morgans has a price target of 85 cents on Alliance shares compared to 51 cents at the time of writing.

Premier Investments Ltd (ASX: PMV)

Premier recently reported its full-year results, with revenue slipping 2.8% to $808 million and net profit falling 10.3%.

The retailer maintained a strong dividend payout, however, and said the start to FY27 had been steady with sales within 1% of the same period the previous year.

Macquarie analysts said in a new research note on the company that the result was in line with recently lowered profit guidance and that sales were broadly in line with their expectations.

The analysts said they were positive about Smiggle repositioning itself in the market to focus on older tweens and said the Peter Alexander store rollout program was strong.

Macquarie has a price target of $15.70 for Premier shares, compared with $11.82 at the time of writing.

Minerals 260 Ltd (ASX: MI6)

Macquarie said in its research note on Minerals 260 that the company’s Bullabulling Gold Project was the third-largest undeveloped project in Australia and the only large-scale, long-life asset not owned by a producer.

Macquarie added:

MI6 currently trades on an Enterprise Value to Resource ounce of $321/oz, a 31%/41% discount to ASX listed gold developers/ producers. We see scope for the stock to re-rate as the project is de-risked through FID, construction, commissioning and steady state production.

Macquarie has a price target of $1.30 on Minerals 260 shares compared to 85 cents at the time of writing.

The post 3 ASX shares tipped to return 38% to 60% appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Cameron England 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 Macquarie Group. The Motley Fool Australia has recommended Macquarie Group and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.