Shares in Evolution Mining Ltd (ASX: EVN) were buoyant for the bulk of FY22 and then pared their gains to close out the year.
The share peaked at $4.96 on 16 July 2021 and was in sideways territory until it collapsed in April 2022.
What's in store for Evolution shares?
Whilst we can't predict the future, we can get an idea of what the sentiment on Evolution shares currently is.
Analysts at Morgans recently dubbed the share a buy, valuing the company at $3.23 in the process.
The Morgans team reckons there's value in Evolution following the large retracement in its share price, brought on by the miner's FY22 guidance downgrade.
Meanwhile, seven brokers rate Evolution as a buy right now, while eight say it's a hold, according to Refinitiv Eikon data. There are two brokers saying sell.
The consensus price target from this list is $3.30 per share, suggesting Evolution shares could rally.
Gold price causing problems
Moreover, the gold price continues to be a contentious issue for Evolution. Gold has slipped hard from its 8 March highs of US$2,052/5.oz and now trades at US$1,727/t.oz.
"Although gold is considered an inflation hedge, rising rates draw investors away from bullion by raising the opportunity cost of holding the zero-yield asset," Reuters reported today.
With gold now testing key support levels, its next moves will be crucial for shares of Evolution Mining.
A lower expected gold price on a lower production could be the lethal combination that locks in losses for Evolution shares. Especially given the market's reaction to its production guidance downgrade.
Time will tell as to how all these moving parts will work out. Returns for both the commodity and Evolution shares since June 2021 are plotted below.
