Barrick Gold (ABX.TO)(GOLD) shares have been downgraded at CIBC Capital Markets. Analysts say lower production and higher costs at mines in Nevada and the Dominican Republic warrant a more than 18 per cent price target chop.

Earlier this month, the Toronto-headquartered company reported gold output at Nevada Gold Mines fell to 385,000 ounces in the July-to-September quarter, down from 401,000 ounces in the prior three months. While production increased at Barrick’s Pueblo Viejo mine in the Dominican Republic by 23 per cent quarter-over-quarter, the project’s improving performance and capacity are likely to require more short-term spending.

CIBC’s Anita Soni downgraded Barrick to a “neutral” rating, while lowering her price target on the company’s New York-listed shares from US$27 to US$22. The stock closed 2.91 per cent lower at $17.69 per share on Monday, after falling as much as 4.6 per cent earlier in the trading session.

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Barrick Gold Corporation (GOLD)

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View Quote Details17.68-0.54(-2.96%)

At close: 4:00 p.m. EST17.61-0.07(-0.40%)

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“We believe Barrick hosts some of the best assets and a world-class operational team,” Soni wrote in a note to clients on Monday.

Barrick’s Nevada Gold Mines is a joint venture with Newmont (NGT.TO)(NEM) formed in 2019. The company says it’s the single largest gold-producing complex in the world.

“Under-investment in Nevada Gold Mines (which GOLD highlighted in its presentation) prior to the joint-venture consolidation in 2019, combined with the post-pandemic inflationary environment, has presented GOLD with significant challenges,” Soni wrote. “The company is now embarking on a period of reinvestment at NGM which we expect could begin to deliver returns in 2026.”

RBC Capital Markets analyst Josh Wolfson says participants at a recent large-cap precious metals conference in London view the weakness as temporary.

“Strength in the dollar, yields, and equities are viewed as a short-term headwind, while a positive outlook for gold is likely to be supported by the continued theme of de-dollarization and central bank buying, plus ongoing inflation risks,” he wrote in a research note on Monday.