The Regis Resources Limited (ASX: RRL) share price has been the worst performer on the ASX 200 index by some distance on Wednesday.
In early afternoon trade the gold miner's shares are down 9% to $5.88.
Why is the Regis Resources share price being hammered today?
Whilst a good number of gold miners such as Northern Star Resources Ltd (ASX: NST) and St Barbara Ltd (ASX: SBM) have dropped lower today, Regis is underperforming them materially.
With no news out of the company, the reason for this decline appears to be broker notes out of UBS and the Macquarie Group Ltd (ASX: MQG) equities desk this morning.
According to the latter note, analysts at Macquarie have downgraded Regis Resources' shares to an underperform rating from neutral and slashed the price target on them down to $5.10.
This price target implies potential downside of approximately 13% over the next 12 months even after today's heavy decline.
The broker made the move in response to Regis Resources' quarterly update on Tuesday. Although the gold miner's production was in line with expectations, its costs were higher than forecast.
Unfortunately, this isn't a one-off. Macquarie notes that management's guidance implies further increases in costs in FY 2020.
Also downgrading its shares to a sell rating from neutral was UBS. It believes its shares are overvalued after a strong share price rally this year, especially given its higher than expected costs.
UBS has trimmed its price target on Regis Resources' shares to $4.85, implying potential downside of a further 17.5%.
And for good measure, Morgan Stanley retained its underweight rating and lowly $4.20 price target and Credit Suisse has continued with its sell rating and cut the price target on its shares to an even lower $3.90.
Given this tidal wave of bearishness, I can't say I'm surprised to see its shares sinking lower today.
