Northern Star Resources (ASX:NST) is back in focus after Gold Fields cancelled its unsolicited A$38.5b takeover proposal, which Northern Star's board unanimously rejected as offering an inadequate price and an unfavourable risk mix for investors.
With Northern Star Resources now trading at A$23.29, the stock has given investors a 23.88% 90 day share price return and a slightly positive 0.24% 1 year total shareholder return, suggesting recent momentum has picked up even though the year has been relatively flat overall.
Scan other gold producers showing similar deal driven momentum using our curated 36 elite gold producer stocks to see how Northern Star Resources compares across the sector.
Northern Star Resources has just knocked back a multi billion dollar bid and seen its share price jump. The business looks confident. The question now is whether the current A$23.29 tag makes that level of confidence expensive.
Most Popular Narrative: 5% Undervalued
The most followed narrative currently sees Northern Star Resources trading below its estimated fair value of A$24.57, compared with the latest A$23.29 close. This puts the spotlight on how future growth projects might justify that gap.
Northern Star's ongoing Fimiston mill expansion at KCGM, set for early commissioning in FY'27, is expected to increase plant throughput and annual gold production to an average of 900,000 ounces by FY'29, positioning the company to capitalize on persistently strong global demand for gold, directly supporting future revenue growth and improved free cash flow.
See why 87 investors see Northern Star Resources as 5% undervalued .
The fair value of A$24.57 in that storyline is built using an 8.77% discount rate. This means future cash flows and profits are pulled back into today's money using that required return. Analysts in this framework are also factoring in annual revenue expansion assumptions in the mid-teens and a higher profit margin profile than today. Together, these elements support the idea that Northern Star Resources could justify paying more for each dollar of future earnings than for current results.
All of this hinges on the large projects and integration work described in that narrative, including KCGM, Hemi and any portfolio reshaping, landing roughly in line with expectations on timing, costs and output. If those moving parts come together broadly as modelled, the A$23.29 price sits below the A$24.57 fair value that many investors are using as an anchor. However, if execution or cost pressures bite harder than assumed, that gap could close quickly.
Result: Fair Value of A$24.57 (UNDERVALUED)
Still, that confidence rests on big projects landing smoothly, with any delay or cost overrun at KCGM or Hemi quickly cutting into the Northern Star Resources fair value story.
Find out about the key risks to this Northern Star Resources narrative .
Another View: Northern Star Resources Through A Cash Flow Lens
The fair value story for Northern Star Resources looks very different when using the SWS DCF model. On this approach, the A$23.29 share price sits above an estimated future cash flow value of A$14.60, which frames the stock as expensive rather than 5% undervalued.
That gap matters because it highlights two competing stories for the same asset: one anchored on earnings and multiples, and the other on long term cash generation. As an investor, which anchor fits better with how you think Northern Star Resources will actually convert its projects into hard cash?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day ( check out Northern Star Resources for example ). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 5 high quality undervalued stocks . If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Feeling torn between the 5% undervalued story and the richer cash flow view on Northern Star Resources? Act while the details are fresh, and test the optimism against the underlying numbers by checking the 2 key rewards .
Looking for more investment ideas beyond Northern Star Resources?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include NST.AX .
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