Canaccord Genuity lowers target price on Fresnillo

(Sharecast News) - Analysts at Canaccord Genuity cut their target price on Fresnillo from 2,900p to 2,700p and kept their 'hold' rating on the stock after third quarter production missed forecasts, leading the broker to trim its valuation multiples.

Canaccord Genuity said silver output came in 7% below its estimates and consensus, with lower grades across several underground mines weighing on results, while gold production was broadly in line with expectations.

Guidance for 2026-28 was unchanged, though Canaccord nudged its 2026 production forecast 2% lower and highlighted ongoing operational constraints linked to ground conditions and equipment availability.

The Canadian bank said it continues to see downside risk to 2027 consensus underlying earnings and freecashflow forecasts, citing a lower price deck, higher cost assumptions and persistent inflation in consumables, though it noted a weaker peso offered some offset.

Canaccord highlighted that dividends could be a relative bright spot, with its payout forecasts sitting above consensus and implying an average yield of around 6% over 2026-28.

While rolling forward its net asset value and updating commodity assumptions lifted mediumterm earnings estimates, Canaccord reduced its NAV and EBITDA multiples to reflect current trading levels, leaving it on the sidelines despite what it sees as longterm marginexpansion potential.

Reporting by Iain Gilbert at Sharecast.com