Key Takeaways
- NovaGold Resources shares have fallen 55% from their March 2 closing high, to $6.36 at the Oct. 7 close.
- On Oct. 7, Morgan Stanley kept its Overweight rating and trimmed its price target to $13 from $13.60, 104% above that close.
- NovaGold has no production or earnings, so the case rests on the Donlin Gold project, whose feasibility study is expected in the first half of 2027, and on financing that hasn’t been arranged yet.
- Morgan Stanley’s target looks plausible but stretched: the stock traded there in late February, and the events that could get it back are still ahead.
NovaGold Resources (NG) has lost 55% since its March 2 closing high, finishing at $6.36 on Oct. 7. Morgan Stanley still sees it more than doubling.
What’s weighing on NovaGold
In its June 24 second-quarter report, NovaGold said it spent a net $22.7 million in the quarter to May 31 as the Donlin Gold feasibility study ramped up, leaving $370.2 million in cash and term deposits. That’s enough to finish the study, but the company expects to raise more money at some point.
Then there are the courts. The Alaska Supreme Court heard arguments on June 3 over the project’s Clean Water Act certification, the last challenge to its state permits. As CEO Greg Lang said on the June 24 call, “typically, the court in Alaska takes about a year to issue a ruling.”
What Morgan Stanley sees
On Oct. 7, Morgan Stanley analyst Carlos De Alba kept his Overweight rating and trimmed his price target to $13 from $13.60. That’s 104% above the day’s close.
All six analysts TIKR tracks rate NovaGold a Buy or Outperform, and the consensus target stood at $13 on Sept. 30.
The bull case is the asset. NovaGold’s release puts Donlin at about 40 million ounces of measured and indicated resources, at more than twice the industry’s average grade.
Does $13 add up?
With no production and a $25.5 million loss in the quarter to May 31, NovaGold has no P/E to check. What it has is analysts’ targets, which have barely moved since March while the stock fell by more than half…
At the end of February, the stock closed at $13.32, just under the $14 consensus target. By Sept. 30, it was $6.50 against $13.
The catch is money. Donlin still needs construction financing. And the deal to buy Paulson’s 40% of Donlin is all stock: today’s NovaGold holders end up with about 65% of the combined company, which will own all of Donlin.
Where I come down
Morgan Stanley’s call is plausible but stretched. The $13 target is where the stock traded in February, but what would pull it back there hasn’t happened yet: a finished study, a financing plan and the court ruling.
Lang expects the study in the first half of 2027. If it lands on time with a workable plan to pay for the mine, $13 gets a lot easier to defend. Until then, watch the Paulson deal, targeted to close in the fourth quarter, and NovaGold’s third-quarter report.
So what is NovaGold stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
