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Citi reiterates 'buy' on Fresnillo, hikes price target
(Sharecast News) - Citi lifted its price target on Fresnillo on Monday to 3,900p from 3,000p and reiterated its 'buy' recommendation on the precious metals miner as it raised estimates for earnings and cash flow to factor in higher silver and gold prices. Citi now forecasts 2026 EBITDA at $3.9bn, up 27% versus a year earlier, while 2026 free cash flow is expected at $2.1bn, up from $1.6bn in 2025.
"Our base case estimates are based on $58 and $4,375 silver and gold prices, compared to spot prices at $80 and $4,562," the bank noted. "Our revised EBITDA and FCF estimates for 2026 could be higher between 28-32% on spot commodity prices, implying a solid mark-to-market momentum for the stock."
Citi said it sees Fresnillo paying a $1bn cash dividend in 2026, while a $0.6bn outflow for the Probe Gold acquisition "is likely to build a solid pipeline for organic growth".
It said the valuation at 7.7x 26 estimated EBITDA and a 6.8% FCF yield are attractive even after a rally of more than 400% year-to-date.
At 1120 GMT, Fresnillo shares were up 4.1% at 3,490p, in line with a broader rally in the sector, as gold prices were boosted by a flight to safety after the US capture over the weekend of Venezuelan leader Nicolas Maduro.
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