Much to the delight of its shareholders, the St Barbara Ltd (ASX: SBM) share price has been a standout today with a sizeable gain.
At lunch the gold miner's shares are 5% higher to $2.75.
What happened?
Although the market response to St Barbara's quarterly update yesterday was rather subdued, it has been anything but that today thanks to the release of a number of favourable broker notes.
This morning no less than three top brokers reiterated their buy ratings on the gold miner's shares following a review of its quarterly performance.
Analysts at Citi, Credit Suisse, and Deutsche Bank all agree that St Barbara is in the buy zone right now, with the latter of the three most bullish on its prospects.
According to a note out of Deutsche, its analysts not only reiterated their buy rating, but also increased their price target to $3.20. This implies potential upside of over 16% for its shares on top of today's gain.
The broker appears to have been particularly impressed with production at its Simberi operation. Simberi produced a record 32,000 ounces during the quarter.
Should you invest?
Based on Deutsche's forecast St Barbara's shares are changing hands at a little under 8x full-year earnings.
In my opinion this does make it great value for money if the gold price remains at its current level. Especially when you consider that Newcrest Mining Limited (ASX: NCM) shares are trading at around 35x forecast full-year earnings.
As I'm reasonably bearish on the gold price moving forward, I wouldn't be in a rush to invest in its shares. But if I were bullish on gold then I would snap up shares in a heartbeat.
