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Goldman Sachs lifted its outlook on two Australian gold miners on June 5, 2024, while keeping a cautious stance on a third.
Analyst Calls and Targets
Tim Babbitt, senior analyst at Goldman, upgraded Newcrest Mining Ltd (NCM.AX) to Buy with a price target of $30.00 — a 12% upside from the $26.80 close. He also raised Northern Star Resources Ltd (NST.AX) to Buy at a $18.00 target, implying roughly 15% upside from $15.60. Evolution Mining Ltd (EVN.AX) stayed at Neutral with a $9.50 target, about 5% below its $10.00 last price.
“We remain bullish on Australian gold exposure given the sector’s low‑cost advantage,” Babbitt said.
And the analyst cited the recent dip in the U.S. dollar and the rally in spot gold – now above $2,100 per ounce – as key tailwinds. Because the Aussie‑dollar has weakened, export margins improve for miners. So investors get a double boost: higher gold prices and cheaper currency.
Why the Divergence?
Newcrest and Northern Star both reported cost reductions in Q1 2024, shaving $120 million and $85 million off operating expenses respectively. Their flagship mines, Cadia Valley and Kalgoorlie, have hit record ore grades, which Babbitt highlighted in the note. Evolution, by contrast, faces a delayed expansion at the Mt. Carlton project – a setback that keeps its earnings outlook flat.
I checked the charts – Newcrest’s stock jumped 3% after the note, Northern Star surged 4%, while Evolution slipped 1%. Not what the bulls wanted for EVN, but the market seems to reward the cost‑cutters.
In my experience trading gold miners, the Australian sector often leads global sentiment; when one of the three moves, the others tend to follow. That’s why the spread between NCM and EVN narrowed to just 2.5 points this week.
Pure panic. The market can overreact – yesterday’s swing erased about $2 billion in combined market cap before a modest rebound.
The Bottom Line
- Newcrest (NCM.AX) – Buy, $30 target, +12% upside.
- Northern Star (NST.AX) – Buy, $18 target, +15% upside.
- Evolution (EVN.AX) – Neutral, $9.5 target, –5% downside.
- Gold spot above $2,100/oz, supporting upside.
For more context on gold’s rally, see Reuters. And if you’re tracking market sentiment, don’t miss the latest on crypto volatility Bitcoin Plunges to Seven-Week Low or the holiday consumer boost in Disney Holiday Shopping Event.
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