Last Update 10 Feb 26

Fair value Increased 17%

HOC: Mixed Broker Views And 2026 Output Plans Will Shape Measured Upside

Narrative Update

The analyst price target for Hochschild Mining has moved higher. Recent Street research cites an updated fair value of about £7.59 per share, adjusted revenue growth assumptions of around 18% with slightly higher profit margin expectations, and a modestly lower future P/E of about 14x as key drivers.

Analyst Commentary

Recent Street research around Hochschild Mining shows a mix of optimism and caution, with multiple price target changes and at least one fresh downgrade close together in time. Here is how that filters through for you as an investor trying to interpret the signals.

Bullish Takeaways

Bullish analysts lifting price targets, including a sizeable 140 GBp adjustment, point to greater confidence in Hochschild Mining's ability to support the higher fair value of about £7.59 per share.
The updated revenue growth assumption of around 18% indicates that analysts see scope for the company to scale its top line, which feeds into higher projected earnings at the new P/E of about 14x.
Slightly higher profit margin expectations indicate that bullish analysts are focused not only on volume growth but also on execution quality and cost discipline.
The combination of a revised P/E of about 14x and higher targets suggests that some analysts view the shares as reasonably valued relative to their earnings assumptions rather than stretched.

Bearish Takeaways

The recent downgrade from JPMorgan signals that not all analysts are comfortable with the risk or execution profile at the current share level, even with higher price targets elsewhere.
A modestly lower future P/E of about 14x indicates some caution around how much investors may be willing to pay for Hochschild Mining's projected earnings, pointing to concerns about sustainability of growth or profitability.
The close timing of a downgrade alongside raised targets underlines that there is disagreement on how confidently to underwrite the 18% revenue growth assumption.
Bearish analysts are likely focused on the possibility that, if margins or growth assumptions are not met, the higher target of about £7.59 per share could be difficult to justify on an execution or valuation basis.

What's in the News

Hochschild Mining issued production guidance for 2026, targeting total output of 300,000 to 328,000 gold equivalent ounces. This provides a rough range for what management is planning to deliver in the near term (company guidance).
The company reported fourth quarter 2025 silver production of 2,336 koz compared with 2,855 koz a year earlier, and gold production of 69.41 koz compared with 82.83 koz. This offers fresh data on recent output trends (operating results).
For the full year 2025, silver production was 9,251 koz compared with 10,530 koz in the prior year, and gold production was 259.16 koz compared with 281.14 koz. These figures help set the baseline investors may use when weighing the new 2026 guidance (operating results).

Valuation Changes

Fair Value: updated from about £6.52 to about £7.59 per share, reflecting a clear step up in the assessed equity value.
Discount Rate: moved slightly higher from about 8.52% to about 8.67%, indicating a marginally higher required return in the model.
Revenue Growth: revised from about 14.36% to about 18.35%, representing a meaningful uplift in the sales growth assumption.
Net Profit Margin: adjusted from about 25.58% to about 27.42%, showing a modest increase in expected profitability on each pound of revenue.
Future P/E: trimmed from about 14.24x to about 14.00x, indicating a small reduction in the earnings multiple used alongside the higher fair value.

Operational improvements, exploration success, and project pipeline diversification are set to boost output, extend mine life, and reduce risk.
Strong gold and silver demand and strengthened ESG credentials support higher revenues, valuation, and investor appeal.
Heavy dependence on successful new projects and brownfield exploration, combined with high costs, political risks, and rising debt, threaten long-term profitability and financial flexibility.

Catalysts

About Hochschild Mining

A precious metals company, engages in the exploration, mining, processing, and sale of gold and silver deposits in Peru, Argentina, the United Kingdom, Canada, Brazil, and Chile.What are the underlying business or industry changes driving this perspective?

Ongoing operational recovery and step-change improvements at Mara Rosa, including filter repairs, process reorganization, and a new thickener installation in H1 2026, are expected to restore and then increase output, lowering costs per ounce and driving higher revenue and margin expansion in 2026 and beyond.
Substantial reserve and resource growth from brownfield exploration at Inmaculada and Royropata, with significant drilling and resource conversion underway (Royropata's projected output potentially increasing from 100,000 to up to 150,000 ounces annually), is set to extend mine life and support long-term production and cash flow growth.
Project pipeline diversification, with Monte do Carmo (Brazil) and Royropata (Peru) coming online from 2028 and potentially increasing group production by ~60%, will underpin volumes and reduce jurisdictional risk, likely supporting more stable revenue and improved valuation multiples.
Structural demand tailwinds from increased gold and silver prices (up 28% and 25%, respectively, year-on-year) are being fueled by persistent inflation and heightened safe-haven investment appetite, which should continue to positively impact realized selling prices and overall top-line growth.
Enhanced ESG credentials-demonstrated by DNV Level 2 certification, improved safety, water consumption, and waste recycling metrics, and ongoing inclusion in the FTSE4Good Index-position Hochschild to benefit from tightening sectoral environmental and social standards, attracting investor capital and supporting equity re-rating through higher valuation multiples and potentially lower financing costs.

Hochschild Mining Earnings and Revenue Growth

Hochschild Mining Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Hochschild Mining's revenue will grow by 6.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 13.8% today to 15.3% in 3 years time.
Analysts expect earnings to reach $195.5 million (and earnings per share of $0.38) by about September 2028, up from $148.4 million today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as $322 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.7x on those 2028 earnings, down from 15.4x today. This future PE is greater than the current PE for the GB Metals and Mining industry at 11.7x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.71%, as per the Simply Wall St company report.

Hochschild Mining Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Hochschild's long-term production outlook is heavily reliant on bringing new projects like Royropata and Monte do Carmo online from 2028 onward, creating significant execution risk; any permitting delays, technical setbacks, or regulatory issues could defer or reduce these anticipated production increases, thus impacting future revenues and earnings growth.
Persistently high all-in sustaining costs, particularly at Mara Rosa and San Jose (with operational challenges and exposure to lower-grade ore bodies), make profitability vulnerable to weaker gold and silver prices; if commodity prices decline or cost inflation continues, this could compress net margins and lower net earnings.
The company's core assets in Peru and Argentina remain exposed to ongoing political and fiscal instability-including volatile taxation regimes, elimination of government export incentives (as seen in Argentina), and potential future changes following elections-raising the risk of higher royalties, taxes, or operating disruptions, which could suppress cash flows and impact profitability.
Hochschild's overall reserve and production base is largely dependent on ongoing brownfield exploration success to replace depleting resources at mature assets such as San Jose and Inmaculada; failure to deliver meaningful new mineable reserves would shorten asset lives and reduce long-term revenue visibility and valuation.
Increasing capex requirements and higher debt levels (with net debt at $202 million and rising capital outlays for projects like Mara Rosa) could constrain the company's ability to fund growth, pay dividends, or respond to adverse market conditions, increasing financial risk and potentially impacting future shareholder returns.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of £3.322 for Hochschild Mining based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of £3.72, and the most bearish reporting a price target of just £2.81.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.3 billion, earnings will come to $195.5 million, and it would be trading on a PE ratio of 14.7x, assuming you use a discount rate of 7.7%.
Given the current share price of £3.31, the analyst price target of £3.32 is 0.5% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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