Citi downgraded Northern Star Resources (NESRF) to Neutral from Buy with a price target of A$17, down from A$18.30, calling the company’s scrip deal for De Grey a “deviation from their typical bolt-on or asset-turnaround playbook.” The firm thinks the deal makes sense to mitigate an ageing, increasingly capex-intensive portfolio, but adds that in the near-term it detracts from Northern Star’s “clean beta to gold appeal” with the risk of higher expenses plus development risk.
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Read More on NESRF:
- Australia’s Northern Star to Acquire De Grey Mining for $3.26B
- Northern Star Resources to Acquire De Grey Mining
- Northern Star to Acquire De Grey, Boosting Gold Portfolio
- Northern Star Resources Affirms Stable Reserves and Targets
- Northern Star Reports Strong Quarter and Growth Prospects
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
