Berenberg has changed its stance on Fresnillo plc, moving the recommendation from "buy" to "hold" as the precious metals miner's shares have posted a strong run that, in the broker's view, leaves only limited upside.
The bank raised its price target to GBp3,800 from GBp3,400 but nevertheless downgraded its rating. Fresnillo's stock reached GBp3,902, which the broker noted sits close to its revised target and implies about a 3% downside from current levels.
Rationale for the shift
Berenberg acknowledged that there is still "attractive mark to market upside for Fresnillo," but warned that much of that potential appears to be already priced in by the market. The analysts said they believe the market is largely expecting continued mark to market momentum and that, without a material lift in gold and silver prices through 2026, the shares look fairly valued.
The firm pointed to two drivers behind the recent share price strength: improved operational performance at Fresnillo and a substantial run-up in precious metals prices. The company, which is the world's largest primary silver miner, benefited particularly from silver peaking at $120 per ounce before retreating to roughly $85 per ounce at present.
Forecasts and production expectations
Reflecting higher commodity price assumptions and better operational guidance, Berenberg increased its earnings estimates by 45.7% for 2026 and by 37.4% for 2027. The brokerage's production expectations for 2025 are 591,000 ounces of gold and 48.4 million ounces of silver. Those figures sit within Fresnillo's own guidance ranges of 47.5 million to 54.5 million ounces of silver and 550,000 to 590,000 ounces of gold.
Despite these upward revisions, Berenberg signalled caution on volume growth and catalysts. The analysts said they were struggling to identify any material volume growth coming from Fresnillo in the near term and expect a fairly quiet year on the catalyst front.
Acquisition and project timeline
The brokerage updated its model to include Fresnillo's $555 million all-cash acquisition of Probe Mining, which closed in January 2026. That transaction brought the Novador gold project into Fresnillo's portfolio. Berenberg models first production at Novador in 2030, but expects Fresnillo to focus on progressing studies through 2026 rather than making any major investment decisions next year.
Dividends, cash position and valuation multiples
Dividend expectations formed another part of Berenberg's downgrade rationale. The broker forecasts a fiscal 2025 dividend of $1.16 per share, which is above the Bloomberg consensus of $1.07 per share. With a projected net cash balance of $1.8 billion, the analysts raised the possibility that management could face pressure concerning the size of future dividend payouts.
Berenberg also highlighted current valuation metrics. The shares trade at 1.83 times net asset value and 6.9 times EBITDA. To derive its updated price target, the broker applied elevated multiples of 1.5 times NAV and 8 times 12-month forward EBITDA.
Assets and joint ventures
Fresnillo operates wholly owned assets across Mexico's Zacatecas and Sonora regions, with the notable exception of Juanicipio, which is structured as a 56:44 joint venture with Pan American Silver.
Note on scope: This report summarizes Berenberg's published view and the factors the brokerage has cited in moving its recommendation to "hold." It sets out the broker's updated forecasts, valuation assumptions and expectations for production, dividends and project timing as provided in Berenberg's analysis.