Equity research analysts at HSBC have upgraded their investment rating on precious metal miner Fresnillo (LON:FRES) to 'buy' from 'hold' believing the market is not giving a full value for its Juanicipio project, which could be the next world class gold-silver mine for the company.
HSBC added: "There is no arguing that the stock trades at multiples higher than most gold miners in the sector. However, there should also be no denying, in our view, that with Fresnillo, one gets what one pays for; that is, high quality assets, long average mine life, growth and a very strong balance sheet."
It also reckons the recent share price pullback offers an attractive re-entry point for investors.
Target increased to 2,200 pence per share (from 1,990 pence), implying over 20 per cent potential upside.
At 1:48pm: (LON:FRES) Fresnillo PLC share price was +28.5p at 1805.5p