Update shared on30 Aug 2025
Fair value Increased 1.43%Fresnillo's consensus analyst price target was raised to £14.18 as analysts anticipate stronger earnings and cash flows on higher silver price forecasts, though concerns remain that the current share price already reflects overly optimistic long-term silver assumptions and presents a less compelling risk-reward, limiting further upside at current valuation.
Analyst Commentary
- Bullish analysts are raising price targets based on a substantially improved silver price outlook and more favorable sector backdrop.
- Target upgrades reflect stronger anticipated cash flows and higher realized silver prices, leading to upward earnings estimate revisions.
- Bearish analysts note the shares are now pricing in a silver price of over $40/oz through perpetuity, seen as overly optimistic and limiting valuation safety.
- Following a steep 2025 re-rating, concerns have emerged about a less attractive risk-reward profile, with limited further upside at current valuation multiples.
- Some recommend waiting for a more attractive entry point, as recent strong share performance may have already captured much of the near-term upside potential.
What's in the News
- Fresnillo declared an interim dividend of 20.8 US cents per Ordinary Share, totaling USD 153.3 million, payable to shareholders in September.
- The company updated and reaffirmed its production guidance for 2025-2027, expecting attributable silver output of 47.5-54.5 moz in 2025, 45-51 moz in 2026 and 2027, with corresponding ranges for gold, lead, and zinc production.
- Q2 2025 gold production rose to 157,735 oz from 130,025 oz year-over-year, while silver, lead, and zinc production declined versus the prior year.
Valuation Changes
Summary of Valuation Changes for Fresnillo
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from £13.98 to £14.18.
- The Future P/E for Fresnillo has significantly fallen from 17.00x to 12.85x.
- The Discount Rate for Fresnillo remained effectively unchanged, at 9.29%.
Disclaimer
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