| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
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Elliott Investment Management presents a detailed case that Northern Star Resources, Australia's largest gold miner, possesses world-class assets including KCGM, Hemi, and Pogo that are trading at a steep discount due to operational failures rather than asset quality issues. The company has underperformed peers by 203% over three years and trades at the lowest valuation multiples in its peer group despite owning what could become the second largest Tier-1 gold mine globally. Elliott documents seven guidance misses in four years, cost overruns exceeding 17% on the KCGM mill expansion, and significant talent exodus at senior levels. The firm advocates for immediate action on two parallel tracks: launching a formal strategic review to explore all alternatives including a company sale, and pursuing a comprehensive turnaround with a new world-class CEO and enhanced board. Elliott emphasizes the timing is optimal given strong gold prices, record industry cash flows, robust M&A activity with over $50 billion in recent deals, and significant strategic interest from major miners seeking Tier-1 assets in developed jurisdictions. The presentation argues Northern Star's leadership void and operational crossroads create urgency for decisive board action to unlock shareholder value.
Elliott's core thesis is that Northern Star Resources owns world-class gold mining assets in premier jurisdictions that are deeply undervalued due to years of operational mismanagement, repeated guidance failures, and leadership credibility issues, creating a compelling opportunity for value realization through either strategic sale or comprehensive operational turnaround.
Elliott believes Northern Star stands at a critical crossroads requiring urgent action over the next few months. The firm advocates for an immediate strategic review to explore all alternatives including a sale of the company, which Elliott believes would attract significant interest from major gold miners given the strong M&A environment and demand for Tier-1 assets. Absent a sale, Elliott calls for a comprehensive turnaround including hiring a world-class external CEO, conducting a thorough operational review, enhancing the board, and establishing clear medium-term targets. The tone is urgent and prescriptive, emphasizing that Northern Star's world-class assets deserve best-in-class leadership to unlock their full potential.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jun 2 2026 | 2026 Q2 | NST.AX | Activist, Australia, Gold Miners, M&A, Mining, Operational Turnaround, Strategic Review | - | Elliott argues Northern Star Resources owns world-class gold assets in Australia and Alaska that are deeply undervalued due to operational failures and leadership issues. The company has underperformed peers by 203% over three years despite possessing what could become the second largest Tier-1 gold mine globally. Elliott demands immediate strategic review including potential sale, citing strong M&A environment and significant buyer interest, or alternatively a comprehensive operational turnaround with new leadership. |
| Apr 27 2026 | 2026 Q1 | 6367.T | Activist, HVAC, Japan, Margin Improvement, value creation | 6367.T | Elliott targets Daikin as a deeply undervalued global HVAC leader trading at historic discounts despite strong competitive moats. The activist firm identifies 500bp margin improvement potential through operational efficiency plus significant capital return opportunities via buybacks. With secular tailwinds from electrification and data centers, Elliott projects 70%+ EPS upside through better execution and capital allocation. |
| Jan 18 2026 | 2025 Q4 | 7203.T, KGX.DE | activism, Governance, Industrial, Japan, M&A, Tender Offer, valuation | 6201 JP | Elliott opposes Toyota Industries' ¥18,800 tender offer as 40% below intrinsic value of ¥26,134 per share. The activist proposes a standalone plan targeting ¥40,000+ by 2028 through operational improvements and cross-shareholding unwinds. Views this as a critical test of Japanese corporate governance reforms and minority shareholder rights. |
| Sep 3 2025 | 2025 Q2 | PEP | Activist, Beverages, CPG, Food, Operational, Restructuring, turnaround, value |
PEP PEP |
Elliott targets PepsiCo with $4 billion stake, proposing operational restructuring to address decade-long beverage underperformance and recent food business deterioration. Key initiatives include potential bottling refranchising, cost realignment, portfolio streamlining, and enhanced accountability. The activist sees over 50% upside potential through strategic focus and margin expansion at the underperforming consumer giant. |
| Feb 11 2025 | 2024 Q4 | MPC, PSX, VLO | activism, Conglomerate, Midstream, operations, Refiners, Spinoff, value | - | Elliott demands Phillips 66 immediately streamline its conglomerate structure through midstream spinoff worth $40+ billion and CPChem divestiture, while closing operational performance gaps that trail Valero by $4.75 per barrel in Q4 2024. After decade of underperformance versus peers, structural changes and enhanced oversight are essential to unlock substantial discount to sum-of-parts value. |
| May 15 2023 | 2023 Q1 | NRG | activism, Capital Allocation, energy, Utilities, value creation | - | Elliott Management demands comprehensive changes at NRG Energy after the utility's operational failures and strategic missteps, particularly the poorly received Vivint acquisition. The activist investor's Repower NRG Plan targets board refreshment, $500 million cost reductions, and strategic review of home services, believing execution could create $5 billion value and drive shares to $55. |
| Apr 11 2022 | 2022 Q3 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
Gold MinersElliott presents Northern Star Resources as a top-10 global gold miner with world-class assets in Western Australia and Alaska that are deeply undervalued due to operational missteps. The firm argues KCGM should be one of the world's best gold assets and could become the second largest Tier-1 gold mine globally post-expansion. Elliott advocates for a strategic review including potential sale of the company, citing significant strategic interest from major gold miners seeking Tier-1 assets in developed jurisdictions. |
Gold Mining Australia Alaska KCGM |
GoldThe presentation emphasizes the strong gold price environment and record industry free cash flow as creating optimal conditions for strategic transactions. Elliott notes all-time high demand for Tier-1 mining assets and strong industry balance sheets. The firm highlights that Northern Star produces 100% of its gold in Tier-1 regions with stable regulatory regimes. |
Gold price Commodity Tier-1 assets | |
BuybacksElliott explicitly states that any proceeds from a strategic review should be returned to shareholders. This reflects a capital allocation framework focused on shareholder value return rather than reinvestment or balance sheet management. |
Capital allocation Shareholder returns | |
| 2026 Q1 |
HVACElliott presents Daikin as the #1 global HVAC player with leadership across regions, products, and end markets. The HVAC market is expected to grow at GDP+ rates, supported by urbanization, electrification, climate-driven cooling demand, and data center demand. Daikin has gained global market share over the last decade and has strong competitive advantages through technology leadership, vertical integration, and fortified distribution networks. |
HVAC Air Conditioning Heat Pumps Commercial Residential |
Data CentersData center capacity is expected to grow at double-digit annual rates, with high-density cooling systems needed for intensive AI workloads. This represents a key growth driver for HVAC demand, particularly benefiting Daikin's position as a top-four player in Commercial/Industrial HVAC including data centers. |
Data Centers AI Cooling Infrastructure | |
Energy TransitionStricter efficiency and electrification standards are accelerating HVAC replacement cycles. Subsidies like EU REPower and IRA promote heat pump adoption, while refrigerant phase-down drives technology upgrades. Europe's electrification trend positions Daikin above industry-average growth. |
Electrification Heat Pumps Efficiency Regulation | |
BuybacksElliott recommends significant share buybacks as part of balance sheet control to improve ROE. The analysis suggests over ¥1 trillion of capacity to right-size leverage and reduce book equity through returning capital to shareholders, with buybacks assumed throughout FY3/27 and FY3/28. |
Share Buybacks Capital Return ROE | |
| 2025 Q4 |
Small CapsSmall-cap equities ended 2025 on a positive but volatile note with the Russell 2000 returning 2.2% in Q4. The manager expects the outlook for small-cap equities entering 2026 to be increasingly constructive, particularly within value-oriented segments, driven by Federal Reserve monetary easing and improving earnings momentum. |
Small Cap Russell 2000 Value Earnings Volatility |
ValueValue-oriented stocks remain attractively positioned with growth stocks continuing to trade at a meaningful premium. The manager believes periods of accelerating profits have historically favored value leadership, particularly within smaller-cap universes, and sees compelling opportunities as market leadership broadens. |
Value Growth Premium Leadership Valuation Opportunities | |
RatesThe Federal Reserve's shift toward monetary easing represents an important inflection point for smaller companies, which tend to be more sensitive to changes in interest rates and credit conditions. Lower borrowing costs should support refinancing activity, capital investment, and margin recovery. |
Federal Reserve Interest Rates Monetary Easing Credit Refinancing | |
EarningsConsensus expectations point to a meaningful acceleration in small-cap earnings in 2026, with growth projected in the low-to-mid teens and exceeding that of large-cap companies. This anticipated rebound reflects easier year-over-year comparisons, improving operating leverage, and broadening demand across cyclical sectors. |
Earnings Growth Operating Leverage Cyclical Consensus Acceleration | |
| 2025 Q2 |
BeveragesPBNA has underperformed peers for over a decade on growth and margins due to strategic missteps including self-inflicted share losses in soda, underperforming vertically integrated bottling structure, and proliferation of new brands. Elliott proposes evaluating refranchising of bottling network and conducting brand portfolio review to reduce complexity. |
Bottling Carbonated Soft Drinks Market Share Refranchising Portfolio Optimization |
FoodPFNA has begun to falter with slowed growth due to challenging consumer backdrop and PepsiCo-specific issues, while substantial investment increases have compressed profit margins. Elliott believes more action is warranted including realigning cost base and evaluating efficiency opportunities beyond management's recently announced streamlining initiatives. |
Snacking Profit Margins Cost Optimization Consumer Demand Operational Efficiency | |
| 2024 Q4 |
RefinersElliott criticizes Phillips 66's refining operations, noting EBITDA per barrel trails best-in-class peer Valero by $3.75 per barrel, widening to $4.75 in Q4 2024. The firm calls for ambitious refining targets reflecting best-in-class performance and closing the EBITDA gap with peers. |
Refiners EBITDA Valero Operations Targets |
MidstreamElliott highlights Phillips 66's world-class midstream business focused on the NGL value chain as highly valuable. They believe it could command a premium valuation exceeding $40 billion and should be sold or spun off to unlock value currently obscured by the conglomerate structure. |
Midstream NGLs Spinoff Valuation Premium | |
PetrochemicalsElliott views Phillips 66's chemicals joint venture CPChem as a world-class asset that should be divested. They believe the asset would likely attract significant interest from its existing JV partner or other potential buyers as part of portfolio streamlining. |
Petrochemicals CPChem Divestiture Joint Venture Buyers | |
| 2023 Q1 |
Shareholder ActivismElliott is engaging in activist investing with NRG Energy, demanding board changes, operational improvements, and strategic review of the Vivint acquisition. The firm is pushing for a comprehensive value creation plan called the Repower NRG Plan to address what it sees as significant underperformance since their previous successful engagement in 2017. |
Activism Board Changes Value Creation Engagement |
EnergyElliott views NRG's integrated power business as attractive and believes the company plays a critical role in Texas and other energy markets. They see the retail franchise as a crown jewel that has remained a market leader in Texas for more than 20 years, navigating a rapidly evolving industry backdrop. |
Power Generation Retail Electricity Texas Energy Integrated Power | |
Capital AllocationElliott proposes establishing a new capital allocation framework to return at least 80% of free cash flow to shareholders, with growth investments focused on generation and retail businesses. They believe NRG could return $6.5 billion of excess capital over the next three years, representing approximately 85% of current market cap. |
Free Cash Flow Shareholder Returns Capital Framework Excess Capital |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 27, 2026 | Fund Letters | Elliott Management | 6367.T | Daikin Industries Ltd | Building Products & Equipment | Building Products | Bull | New York Stock Exchange | activist, Air Conditioning, capital allocation, Footprint Optimization, HVAC, Japan, manufacturing, margin expansion, operational efficiency, ROE improvement, turnaround, value creation | Login |
| Jan 18, 2026 | Fund Letters | Paul Singer | 6201 JP | Toyota Industries Corporation | Industrials | Industrial Machinery | Bull | New York Stock Exchange | Activism, Governance, Sum-of-the-Parts, Takeovers, Under valuation | Login |
| Sep 3, 2025 | Fund Letters | Paul Singer | PEP | PepsiCo Inc. | Consumer Staples | Soft Drinks | Bull | NYSE | Margins, restructuring, turnaround, valuation | Login |
| Sep 2, 2025 | Fund Letters | Elliott Management | PEP | PepsiCo Inc. | Consumer Staples | Soft Drinks | Bull | NASDAQ | activist, Beverages, consumer staples, CPG, margin expansion, portfolio optimization, Refranchising, Snacks, turnaround, value unlock | Login |
| TICKER | COMMENTARY |
|---|---|
| NST.AX | Northern Star is a top-10 global gold miner by production. NST owns a high-quality portfolio of gold mines in Western Australia and Alaska. Following the 2021 merger with Saracen, NST is the largest ASX primary-listed gold miner and the largest gold miner in Australia. Northern Star should be a world-class gold miner and offers significant upside, but has deeply underperformed its potential. 203% total return underperformance vs. Peers over last three years. Lowest P/NAV and EBITDA multiples of any peer. Repeated operational missteps. Missed guidance seven times in the past four financial years, including four separate guidance reductions in the first three months of 2026. Deeply inadequate disclosures compared to global senior peers, including no public detailed technical reports to support multi-billion-dollar capital investments. KCGM, Hemi, and Pogo are highly valuable, world-class assets. These great mines deserve to be run by a best-in-class leadership team capable of unlocking their full potential and maintaining mining excellence in Western Australia. The market views Northern Star as a poor operator with a pattern of operational missteps and repeated failures to execute capital projects on time and on budget. Protracted difficulties at the KCGM mill call into question management's ability to execute the ramp-up and, beyond that, to develop the Hemi project. Northern Star's capital allocation has been inconsistent and reactive, leaving investors without a clear framework for how value will be created. The result is a valuation that materially understates the quality of Northern Star's underlying assets. Leadership must move decisively to close this gap. Northern Star owes it to its shareholders to promptly explore all strategic alternatives, including a sale of the Company. We believe there would be significant strategic interest in Northern Star. Northern Star should prioritise hiring a world-class external CEO with deep operational and turnaround experience to rectify the issues across the portfolio. The new CEO and Board should announce a comprehensive operational review to ensure that the Company has the right people and strategy to improve planning and execution. |
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