Two S&P/ASX 200 Index (ASX: XJO) gold shares are tumbling today.
The Evolution Mining Ltd (ASX: EVN) share price has dropped 6.75% as of 2pm and is changing hands at $7.155 a piece. Over the past year, Evolution Mining's share price has surged 96.51% higher.
The Newmont Corp (ASX: NEM) share price is suffering a similar fate. Newmont's shares are trading 5% lower as of 2pm, at $87.85 each. The gold miner's share price has jumped 34.06% over the past year.
For context, the ASX 200 Index is also in the red today. As of 2pm, the benchmark index is down 0.39% to 8,556.80 points.
Here's what is causing the price drop.
Image source: Getty Images
Downgrades dampen gains
Goldman Sachs downgraded Evolution Mining's rating to sell from neutral, with a $6.95 price target yesterday. According to the current trading price, that represents a potential downside of 2.86% for the stock.
The broker also downgraded Newmont's rating to neutral from buy.
The downgrades follow valuation concerns and lacklustre production growth ahead of the June quarter results, according to Investing.com.
The broker is also concerned about the Australian gold producers' 2026 outlooks.
Goldman Sachs flagged a "broadly flat" gold production profile for Evolution over the next two years. Its output is expected to dip slightly in FY26 and fall further in FY27 due to stockpile reliance at its Cowal operation, the article explained.
Shares of Evolution are trading at a premium to large-cap peers, the note said, despite limited growth visibility.
Evolution's output is forecast to be 735,000 ounces at an all-in sustaining cost (AISC) of $1,585/oz in FY26. In FY25, production reached 747,000 ounces at $1,635/oz.
According to Goldman Sachs, Newmont, which reports on a calendar year, remains one of the more defensive names in the sector, the article's author wrote.
"However, recent share price outperformance has brought valuations in line with peers, leading to the downgrade. Second-quarter production is expected to total 1.38 million ounces at a gold AISC of about US$1,850/oz, helping generate estimated EBITDA of US$2.63 billion."
Goldman has reaffirmed its buy rating on Northern Star Resources Ltd (ASX: NST), citing solid FY25 sales of 1.634 million ounces and FY26 guidance of up to 1.85 million ounces.
