Last Update 23 Jan 26

Fair value Increased 14%

LUN: Future Returns Will Hinge On Metals Cycles Versus Legal And Macro Risks

The updated analyst price target for Lundin Mining has shifted higher to reflect a fair value move from $28.28 to $32.34, as analysts factor in refreshed commodity price forecasts, a slightly lower discount rate of 7.21% and higher expected future P/E multiples, even as they incorporate more cautious assumptions on revenue growth and profit margins.

Analyst Commentary

Recent Street research on Lundin Mining shows a mix of optimism and caution, with several firms adjusting price targets in different currencies and maintaining a range of ratings from Buy and Outperform to Neutral and Equal Weight. For you as an investor, the key themes center on how analysts see valuation reset, earnings resilience and macro risks tied to commodity demand.

Bullish Takeaways

Bullish analysts are lifting price targets in multiple currencies, which signals that their updated models support a higher fair value range for the shares based on refreshed assumptions.
The move to higher expected future P/E multiples in some research points to confidence that the market may be willing to pay more for Lundin Mining's earnings stream if execution on operations and capital allocation holds up.
Updates to price forecasts across North American metals and mining coverage suggest Lundin Mining is still seen as a viable way to gain exposure to the sector, even as analysts reassess commodity price decks.
Where Buy or Outperform ratings are maintained alongside higher price targets, the message is that, in those models, current trading levels are not viewed as fully reflecting the refreshed fair value estimates.

Bearish Takeaways

Bearish analysts trimming price targets, such as the cut to SEK 151 from SEK 172, highlight concern that prior expectations embedded too much optimism on earnings power or balance sheet risk.
The presence of Neutral and Equal Weight ratings, including from a major firm like JPMorgan, signals hesitation to take a strong positive stance given uncertainties around commodity demand, especially from China.
Comments about a challenging macro backdrop, with slowing commodity demand in China, underline the risk that revenue growth and margins could fall short of earlier assumptions, which would pressure valuation.
Even where price targets are raised modestly, the relatively measured moves indicate that some analysts see limited upside versus their fair value, especially if U.S. and European demand does not offset weakness elsewhere as expected.

What's in the News

Lundin Mining issued consolidated production guidance for 2026 to 2028, with copper expected in a range of 290,000 tonnes to 340,000 tonnes and gold in a range of 132,000 ounces to 158,000 ounces, giving you a multi year view of expected volumes (Corporate Guidance).
The company reported fourth quarter and full year 2025 production results, including quarterly copper production of 87,032 tonnes, record quarterly gold production of 34,129 ounces, and full year copper production of 331,232 tonnes and record gold production of 141,859 ounces (Operating Results).
A new normal course issuer bid was announced, allowing repurchases of up to 67,723,868 common shares, or 7.91% of issued share capital, with any shares bought to be cancelled and the program running to December 15, 2026 (Buyback Transaction Announcement).
Management reported progress on the earlier buyback program, stating that 15,088,180 shares, or 1.86% of the company, have been repurchased for $150 million under the plan announced on December 11, 2024 (Buyback Tranche Update).
The Supreme Court of Canada upheld a 2023 Ontario Court of Appeal decision allowing a proposed securities class action related to disclosure of a 2017 pit wall issue at the Candelaria Mine to proceed, with Lundin Mining indicating it intends to defend the case (Lawsuits & Legal Issues).

Valuation Changes

Fair Value: updated analyst fair value has risen from CA$28.28 to CA$32.34, a move higher within their models for Lundin Mining.
Discount Rate: the discount rate has edged down from 7.55% to 7.21%, reflecting slightly different assumptions used to value future cash flows.
Revenue Growth: projected revenue growth has been trimmed from 3.17% to 2.17%, pointing to more cautious expectations for top line expansion.
Net Profit Margin: expected net profit margin is essentially flat, moving from 16.67% to 16.61%, indicating only a very small adjustment to profitability assumptions.
Future P/E: the assumed future P/E multiple has increased from 30.30x to 35.64x, which lifts the valuation that analysts apply to the company’s earnings in their updated models.

Expansion projects and operational improvements are positioning Lundin Mining to benefit from rising demand for electrification metals and support future revenue growth.
Proactive ESG measures, balance sheet strengthening, and asset portfolio optimization enhance both sustainability profile and financial flexibility for long-term value creation.
Heavy reliance on South American copper assets, limited diversification, and capital-intensive growth heighten exposure to regional, execution, financial, and regulatory risks.

Catalysts

About Lundin Mining

A diversified base metals mining company, engages in the exploration, development, and mining of mineral properties in Chile, Brazil, the United States, Portugal, Sweden, and Argentina.What are the underlying business or industry changes driving this perspective?

Lundin Mining is advancing multiple organic growth initiatives-such as the Vicuña project and brownfield expansions at existing operations-that are expected to significantly increase copper and gold production volumes over the coming years, positioning the company to benefit from rising global demand for electrification metals; these developments are set to drive higher future revenue and EBITDA.
Ongoing investments in process optimization, insourcing of underground mining at Candelaria, and optimization initiatives at Chapada are expected to lower unit costs and enhance operational efficiency, supporting sustainable net margin expansion as these technologies and practices are implemented.
Lundin's proactive ESG improvements-including sourcing renewable energy at Candelaria and achieving its 2030 emissions reduction target ahead of schedule-strengthen its profile as a responsible miner, increasing its appeal to ESG-focused investors and regulators, potentially lowering cost of capital and enhancing earnings resilience.
The recent sale of non-core European assets and associated reduction in net debt has improved balance sheet strength, enhancing Lundin's flexibility to fund key growth projects and maintain shareholder returns (dividends and buybacks), which supports longer-term earnings per share growth.
Lundin's exposure to long-term structural trends-specifically the rising demand for copper, nickel, and zinc driven by global electrification, infrastructure growth, and adoption of green technologies-is expected to underpin favorable pricing and volume growth, providing tailwinds to revenue and profitability as new projects come online.

Lundin Mining Earnings and Revenue Growth

Lundin Mining Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Lundin Mining's revenue will decrease by 0.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 4.2% today to 10.0% in 3 years time.
Analysts expect earnings to reach $364.3 million (and earnings per share of $0.45) by about September 2028, up from $152.5 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $646 million in earnings, and the most bearish expecting $325 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 43.5x on those 2028 earnings, down from 67.0x today. This future PE is greater than the current PE for the GB Metals and Mining industry at 18.0x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.62%, as per the Simply Wall St company report.

Lundin Mining Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The long-term concentration of revenue (94%) and production capacity in South American assets-primarily Candelaria and Caserones-exposes Lundin Mining to region-specific risks such as resource nationalism, changing mining regulations, or potential political/economic instability, which could negatively affect revenues and margins if the operating environment deteriorates.
Heavy dependence on copper (82% of Q2 revenue), with relatively limited diversification into nickel and gold, increases the company's exposure to copper price volatility and cycles; an extended downturn in copper prices or lower global demand growth could significantly impact future earnings and cash flows.
The ramp-up of large-scale expansion projects (notably Vicuña and Saúva) introduces execution risk: permitting delays, budget overruns, labor shortages, or technical setbacks could lead to higher capital expenditure, delayed revenue, or impaired asset value, constraining returns on invested capital and depressing longer-term net margins.
Lundin's current and planned growth is capital-intensive, requiring substantial ongoing investment and additional credit lines; rising interest rates or tighter credit markets could increase debt servicing costs, restrict access to affordable financing, and amplify financial risk, thus eroding earnings and limiting future shareholder returns.
Increasing ESG scrutiny, environmental regulations, and community opposition to large-scale mining may drive up compliance costs, slow project approvals (as seen with ongoing permitting at Vicuña and potential labor in-sourcing at Candelaria), and constrain production volume growth, ultimately weighing on net margins and long-term earnings resilience.

Valuation

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

The analysts have a consensus price target of CA$17.201 for Lundin 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 CA$21.08, and the most bearish reporting a price target of just CA$14.04.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.6 billion, earnings will come to $364.3 million, and it would be trading on a PE ratio of 43.5x, assuming you use a discount rate of 6.6%.
Given the current share price of CA$16.47, the analyst price target of CA$17.2 is 4.2% 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.

Analyst Commentary Highlights Upgraded Price Targets and Profit Outlook for Lundin Mining