Barrick’s Q4 spark meets a divided street

February 12, 2026 (MLN): Barrick Gold Corporation reported strong fourth-quarter 2025 results on February 5, 2026, with adjusted EBITDA of $4.3 billion beating consensus expectations.

However, the company simultaneously reset investor expectations with lower production guidance and higher cost forecasts that triggered a 7.2% decline in share price despite broadly positive analyst commentary.

The world's second-largest gold producer delivered fourth-quarter adjusted EBITDA that exceeded JPMorgan's forecast by approximately 5%, driven primarily by higher-than-expected gold and copper sales volumes and strong realized pricing.

The company generated $1.6 billion in free cash flow during the quarter, lifting its net cash position to approximately $2 billion.

However, the headline numbers masked significant strategic recalibrations. UBS analyst Daniel Major noted that while results were "strong," the company's new 2026-2028 production guidance fell substantially below expectations.

"Adjusting for the reinstatement of production guidance for Mali (not in UBSe/ cons) 2026-28 production guidance was 200-400koz below expectations," Major wrote, adding that "in our view cost guidance was also disappointing" despite higher royalties from elevated gold prices.

JPMorgan's Bennett Moore characterized the results differently, emphasizing that "much of the call was focused on the targeted 4Q26 NA IPO" and viewing the guidance reset as potentially healthy for the stock.

 "With less overhang from LG restarting sooner than expected, management changes finalized, and more achievable expectations at NGM/PV, we feel shares are well positioned to close the gap in the coming months," Moore stated.

Production and Cost Guidance:

Barrick's 2026 gold production guidance of 2.90-3.25 million ounces appears roughly in-line with consensus at approximately 3 million ounces, but this headline figure conceals significant underlying weakness.

The guidance includes 260-290,000 ounces from the Loulo-Gounkoto (L&G) operations in Mali, which were not included in previous consensus estimates due to their suspension in 2025.

Excluding Mali, UBS calculates that Barrick's "underlying" 2026 guidance of approximately 2.8 million ounces sits roughly 200,000 ounces below expectations, with the primary driver being flat or lower production year-over-year at the critical Nevada Gold Mines (NGM) and Pueblo Viejo (PV) assets. JPMorgan similarly noted that NGM's 2026 guidance came in 8%.

The production outlook extends beyond 2026. Barrick provided new three-year guidance showing 2027-28 gold production of 3.30-3.65 million ounces and 3.40-3.75 million ounces respectively.

While these figures appear to show growth, they include approximately 350,000 ounces annually from L&G.

Adjusted for Mali's contribution, UBS estimates the underlying 2027 and 2028 guidance sits approximately 300,000 and 400,000 ounces below both consensus and Barrick's previous 2025 guidance levels.

Rising Cost Pressures Compound Concerns

Perhaps more concerning than lower production is Barrick's significantly higher all-in sustaining cost (AISC) guidance. The company set 2026 cost guidance using a $4,500/oz gold price assumption versus the 2025 average of approximately $3,500/oz, implying higher royalty payments of roughly $50/oz.

Total cash cost (TCC) guidance of $1,400/oz and AISC guidance of approximately $1,850/oz at midpoint represent increases of approximately 200/oz year-over-year, substantially above the inflationary impact of higher royalties alone.

UBS noted that AISC guidance came in roughly $250/oz higher than consensus expectations.

UBS broke down the cost increase drivers: approximately 40% stems from the assumed $4,500/oz gold price and resulting royalty impacts, 40% from mine plan changes (notably at L&G and PV), and 20% from general inflation.

Particularly notable is L&G's guided AISC of approximately $2,800/oz, more than double the operation's pre-closure level of around $1,300/oz, primarily due to significantly higher royalty rates of approximately 20%.

For copper, 2026 production guidance of 190-220 thousand tonnes came in slightly below consensus at 225kt, though JPMorgan noted this aligns with the Lumwana mine expansion timeline.

The 2027 guidance of 195-225kt remains roughly in-line with consensus at 215kt, while 2028 guidance of 255-285kt matches consensus at 275kt, reflecting the Lumwana expansion coming online.

Shareholder Returns Policy Shifts from Buybacks to Dividends

In a notable strategic pivot, Barrick announced a substantially enhanced dividend policy while abandoning share buybacks.

 The company declared a fourth-quarter dividend of $0.42/share, up 140% from the third quarter, and lifted its base quarterly dividend by 40% to $0.175/share ($1.2 billion annualized).

More significantly, Barrick introduced a new framework targeting 50% of attributable free cash flow for shareholder returns on an annualized basis, to be declared in the fourth quarter as a performance dividend.

The company completed the remaining $500 million of its buyback program in Q4 but did not extend the authorization, "signaling a pivot to dividends vs buybacks as a preferred method of returning cash," according to UBS.

JPMorgan characterized the new policy positively, noting that the base dividend increase and performance dividend framework should appeal to income-focused investors, particularly given Barrick's improving free cash flow profile projected at $6.9 billion for 2026.

North American IPO

A major focus of Barrick's investor presentation centered on plans for an initial public offering of its North American gold assets by the end of 2026, though substantive details remained scarce.

The company confirmed it is "preparing for an IPO that is expected to be completed by end of the year" and indicated on the call that "a 10-15% free float is likely and it would be a cash IPO not a share spin-off," according to UBS.

UBS expressed skepticism about the value creation potential of a minority stake IPO: "We believe Barrick's North American assets would trade at a better valuation as a stand-alone entity, but in our view one of the reasons Barrick has traded at a discount to peers is its complexity and conflict in the investment case between low jurisdictional risk gold & high-risk copper growth. We are not convinced creating a separate listed entity that may trade at a premium will drive a re-rating of the parent company."

JPMorgan took a more constructive view while acknowledging uncertainties: "Questions remain around the NA IPO including domicile region, management team, proceeds use and minority listing size (est. <15%), but we don't anticipate a listing sooner than Sep'26 and suspect a HoldCo structure/listing instead of transferring NGM's JV stake could avoid NEM's ROFR [right of first refusal]."

The reference to Newmont's potential ROFR is significant, as Nevada Gold Mines operates as a 61.5%/38.5% joint venture between Barrick and Newmont. Any attempt to transfer Barrick's stake to a new entity could potentially trigger Newmont's contractual rights, adding legal complexity to the transaction structure.

Project Pipeline: Progress and Concerns

On the development front, Barrick reported mixed news across its major growth projects:

Lumwana expansion (Zambia): The $2 billion copper project remains "slightly ahead of schedule" with $416 million spent to date and $750-850 million targeted for 2026, according to UBS. This project underpins the substantial copper production growth anticipated for 2028.

Fourmile (Nevada): Barrick doubled resources at this Nevada project in 2025 to approximately 16 million ounces at 16.5g/t and will continue drilling while developing the Bullion Hill decline in 2026. The company continues targeting a feasibility study in 2029, which would trigger Newmont's option to acquire a 38.5% stake in the project under their JV agreement. UBS noted that "potential for a partial vend-in of Fourmile earlier than 2029 could allow acceleration of the project and could be a positive catalyst for B/NEM."

Reko Diq (Pakistan): This represents the most significant concern in Barrick's portfolio. The company has spent $849 million to date on the project ($721 million in 2025 alone) against a Phase 1 budget of approximately $6 billion.

However, UBS reported that "as a result of escalating security risks, it is reviewing the development timeline & capital budget for the project."

Critically, Barrick had targeted signing a limited recourse project finance facility in the second half of 2025, but this has been delayed.

UBS observed that "following management changes, in our view Barrick's commitment to the project is less certain," though the $650 million in capex earmarked for 2026 suggests continued commitment.

Any significant delays or capital increases at Reko Diq could materially impact Barrick's long-term copper growth trajectory and capital allocation flexibility.

Management Transition Finalized

Barrick finalized two key management changes. Interim CEO Mark Hill was confirmed as permanent CEO, removing the "interim" designation. Additionally, CFO Graham Shuttleworth will step down on March 1, 2026, to be replaced by Helen Cai, who has served on Barrick's board since 2021.

The CEO confirmation provides continuity, though UBS noted that Barrick "will look for new management for the NA IPO," suggesting additional executive recruitment ahead.

Reserve Replacement: Below Historical Averages

Barrick's 2025 reserve replacement performance fell short of historical norms. The company's organic gold reserve replacement ratio (RRR) came in at just 0.5x for fiscal 2025, meaning it replaced only half of the gold it mined during the year.

However, on a trailing five-year basis, the organic RRR remains healthy at 1.8x, according to JPMorgan's analysis.

The weak single-year performance was partially offset by the doubling of resources at Fourmile, which JPMorgan noted could see "further upside likely this year" as drilling continues.

Analyst Recommendations and Valuation Perspectives

Despite the guidance disappointments, both UBS and JPMorgan maintained positive ratings on Barrick, though with different emphasis:

UBS: Maintained a "Buy" rating but reduced its price target to $55/share from $59/share (current price $43.97). The firm uses an unchanged 7x 2027E EV/EBITDA valuation multiple. UBS updated estimates "based off the lower guidance at base assets and higher costs resulting in small EBITDA & EPS" reductions.

Analyst Daniel Major noted that shares currently trade at 4.2x FY27E EV/EBITDA on spot prices, representing a 23% discount to the XAU gold index versus historical in-line trading.

JPMorgan: Maintained an "Overweight" rating with a $68 price target (established at initiation on January 29, 2026). Analyst Bennett Moore emphasized that "investors have generally aligned with our OW rating and view that emerging catalysts can help ease shares' deep discount vs. global peers." JPMorgan noted that Barrick trades at 4.2x on FY27 spot assumptions versus 4.7x/5.5x one-year and five-year averages.

Both firms anticipated consensus estimate reductions following the results. JPMorgan noted: "We anticipate downward revisions to FY26 estimates given the higher costs/lower production guidance."

Gold Market Outlook Remains Constructive

Both analyst reports referenced JPMorgan's Commodities Research team's bullish long-term outlook for gold, with a price target of $6,300/oz by year-end 2026. The commodities team views the recent sharp correction as a "healthy reset" rather than a trend reversal, underpinned by "robust central bank and investor demand 'stressing inelastic supply.'"

According to JPMorgan, central bank and investor net purchases have averaged over 700 tonnes per quarter, "well above the 380t threshold that historically drives prices higher." This structural demand backdrop provides support for Barrick's revenue outlook despite production challenges.

Forward Outlook

Barrick's shares fell 7.2% on the day of the announcement to $43.97, slightly underperforming the broader gold indices (XAU/GDX down 6.3%) while gold itself declined 3.2%.

The stock reaction suggests investors focused more heavily on the production and cost guidance disappointments than on the strong quarterly results or enhanced dividend policy.

Looking ahead, key catalysts and risks for Barrick include:

Quarterly production trajectory: Management indicated gold production should be 45%/55% weighted between the first and second halves of 2026, with Q1 representing the trough due to seasonal NGM downtime.

NA IPO execution: Expected in the fourth quarter of 2026, though structure, management, and proceeds allocation remain uncertain.

Reko Diq development decision: The outcome of the ongoing review could significantly impact long-term copper growth and capital allocation.

Mali operational stability: Sustained production from L&G is critical to meeting guidance, given its material contribution to total output.

Capital allocation at NGM: With buybacks deprioritized, JPMorgan noted "opportunities for excess cash to be put to work at NGM, potentially for a new roaster (est. ~$2B), given ample resource and a processing bottleneck."

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