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Investing.com -- JPMorgan remains bullish on gold miners in the EMEA region, citing a strong macroeconomic backdrop, high free cash flow (FCF) yields, and easing operational risks.
The firm has raised its price target for Fresnillo (LON:FRES) to £10 per share and designated the stock as its top pick among EMEA gold miners.
“We still see a compelling entry point for the EMEA Gold Miners given they screen exceptionally cheap with >10% FCF yields and pose fewer operational risks following recent guidance updates,” JPMorgan wrote.
The bank noted that gold prices have risen 4% since November, yet gold mining stocks have remained flat, creating an attractive buying opportunity.
JPMorgan’s commodities team maintains a bullish outlook for gold in 2025, with a year-end target of $2,950 per ounce, which could be reached sooner if tariff risks escalate.
Fresnillo, which is now JPMorgan’s top gold stock recommendation, trades at ~3.5x its estimated 2025/26 enterprise value to EBITDA (EV/EBITDA) and boasts a 12% FCF yield.
The firm expects the company’s FY24 results on March 4 to further de-risk its investment case, with management likely to confirm easing operational expenditures and a potential currency tailwind from a weaker Mexican peso.
In addition to Fresnillo, JPMorgan remains Overweight on Hochschild and AngloGold, stating that Hochschild “now screens exceptionally cheap at ~2x spot 2025/26E EV/EBITDA and ~10% 2025/26E FCF yield.”
The bank adds that AngloGold could benefit from its primary listing move to the U.S. and the closure of its Centamin acquisition.
JPMorgan believes the current discount in gold miners presents a buying opportunity, reinforcing its bullish stance on the sector for 2025.