The S&P/ASX 200 Index (ASX: XJO) is trending higher on Thursday morning. At the time of writing, the index is 0.22% higher at 9,101.40 points.
Meanwhile, demand for safe-haven assets has pushed the gold price to another record high. According to CNBC, the gold futures price is up 0.49% to US$4,222 per ounce.
The index and gold price rises have filtered through to the Evolution Mining Ltd (ASX: EVN) share price too. At the time of writing, the gold miner's shares are 2.3% higher and changing hands for $11.345 a piece.
The Australian gold mining giant has seen its share price storm 60.9% higher since 1 August. Over the year, it has risen an impressive 126.25% higher, far outpacing the ASX 200 Index.
But in a new note to investors, Macquarie Group Ltd (ASX: MQG) has said it expects the tide to turn over the next 12 months.
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Q1 production levels a miss for the ASX 200 gold mining stock
The broker has retained its underperform rating on Evolution Mining shares but raised its 12-month target price to $7.60 per share.
At the time of writing, that represents a potential 33% downside for investors.
"Underperform. 1QFY26 production was lower than anticipated driven by planned shuts/weather impacts at Cowal/Ernest Henry. FCF was impacted by a A$101m negative WC movement (expected to normalise). FY26 guidance of 780koz is retained (1Q: 23% of total). EVN continues to trade at a premium vs. peers," it said in its investor note.
Evolution Mining produced 174koz in 1QFY26, which is 6% lower than market expectations and 7% lower than Macquarie estimates. There were 7 to 10 days of planned maintenance and wet weather at Cowal, which meant the gold miner had to use lower grade stockpile feed during this period.
Group all-in sustaining cost (AISC), excluding its Mt Rawdon site in Queensland, was A$1,724/oz. This was in line with market estimates of A$1,780/oz, but 29% lower than Macquarie estimates.
The broker noted that 1Q production represents 23% of Evolution Mining's FY26 production guidance of 780koz. The miner is confident that all operations are on track to achieve guidance.
What else did the broker have to say?
Macquarie said that the miner's closing net debt of A$659m at the end of 1Q FY26 was 6% above expectations but 16% higher than market expectations.
Cash increased to A$780m, after Evolution Mining repaid A$170m of debt. This is a $20 million quarter-on-quarter increase. The miner doesn't have any other debt repayments to make until FY29.
"EVN currently trades at 1.74x consensus P/NAV (MQe: ~2.0x), 9x EV/ EBITDA (MQe) vs our Aus. producer avg of 7.5x. Our forecast FY26e FCF yields of 4% are in line with NEM (~5%)," Macquarie said.
