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Investing.com - JPMorgan has raised its price target on Fresnillo Plc. (LSE:LON:FRES) (OTC:FNLPF) to GBP21.00 from GBP18.50 while maintaining an Overweight rating, citing strong gold price outlook and cash return potential.
Fresnillo shares have surged approximately 175% year-to-date and over 200% year-over-year, outperforming gold mining peers by roughly 110% and 150%, respectively, according to JPMorgan’s analysis.
The investment bank forecasts gold prices will rise approximately 20% to more than $4,000 per ounce by mid-2026, with Federal Reserve rate cuts potentially catalyzing central bank purchases and gold ETF inflows.
JPMorgan notes Fresnillo’s improved operational performance has led to higher 2025 gold output guidance and stabilization of its long-term production profile through brownfield investment.
The firm projects Fresnillo will reach approximately $1.3 billion in net cash by year-end 2025, equivalent to about 8% of market capitalization, and could distribute a total dividend yield of roughly 11%, the highest in the EMEA Mining sector.
In other recent news, Fresnillo Plc. has seen its stock rating downgraded by UBS from Buy to Neutral. The decision by UBS comes amid valuation concerns, as the mining company’s shares have surged approximately 170% year-to-date. UBS has set a price target of GBP15.00 for Fresnillo. The downgrade is linked to a significant re-rating of the company’s 12-month forward consensus EV/EBITDA multiple. This multiple has increased from about 3.5x in January 2025 to around 7.5x currently. The current valuation has surpassed its 5-year average of 6.1x and is nearing its 10-year average of 8x. These developments highlight the recent changes in Fresnillo’s financial metrics.
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