Investment bank UBS has issued mixed ratings on leading gold miners, upgrading Newmont while downgrading Northern Star Resources and Evolution Mining. The changes reflect ongoing sector-wide issues with production delays and rising capital expenditures, despite soaring gold prices.
Newmont Elevated as Preferred Large-Cap Gold Stock
UBS raised its price target for Newmont by 17% to $105 and maintained its Buy rating, positioning the company as its top large-cap Australian gold stock pick. After overcoming years of deal-related hurdles and production shortfalls, Newmont reported a strong first quarter and remains on track to produce 5.6 million ounces of gold in 2025.
UBS highlighted Newmont’s expected 8% free cash flow yield in 2026 and continued share buybacks funded through asset sales. With $1.3 billion committed to development capital and net debt below $5 billion, Newmont is set to return excess cash to shareholders while maintaining financial flexibility.
Northern Star Downgraded Over Production Delays
Northern Star’s downgrade reflects concerns over its ability to meet long-standing targets. UBS now forecasts annual production of 1.8 million ounces by fiscal 2026, a 12-month delay from previous expectations. The company’s Kalgoorlie Super Pit faces productivity issues, and permitting delays have pushed back production at the Hemi project to March 2028. UBS has consequently cut earnings forecasts for 2026 and 2027 by 6% each.
While Northern Star’s balance sheet remains strong, UBS notes the need to rebuild confidence in its growth and delivery outlook.
Evolution Mining’s Valuation Pressures Lead to Downgrade
Despite an 81% year-to-date share price increase and solid operational results, Evolution Mining was downgraded to Sell. UBS cited stretched valuations and rising capital expenditure, raising its five-year average capex forecast to $916 million annually—near the top of Evolution’s guidance range. Production forecasts were trimmed by 5% due to grade downgrades at key assets including Red Lake.
UBS concluded that Evolution’s stock is now overvalued, lacking sufficient valuation support at current prices.
Sector Challenges Amid Gold Price Strength
These rating shifts underscore broader challenges for Australian gold miners, who face higher costs, regulatory delays, and mounting pressure to meet ambitious growth targets. While strong gold prices support valuations, UBS warns that operational execution will be crucial in maintaining investor confidence.
The investment bank’s adjustments signal that gains driven purely by rising gold prices may be waning, with company-specific performance increasingly dictating share price movements.
Upcoming guidance updates—especially Northern Star’s expected report following an early August site visit—will be critical in assessing whether these miners can fulfill expectations or risk further analyst downgrades.
