Are Fresnillo Shares Set to Pull Back? This Analyst Thinks So

Fresnillo (LON: FRES) shares slipped more than 4% on Tuesday after Morgan Stanley downgraded the stock to Underweight from Equal Weight, cautioning that its recent rally may have gone too far. 

The stock, which has surged over 138% so far in 2025, edged up about 1.4% in early trading Wednesday, with investors looking for the bullish trend to continue. 

In a research note, Morgan Stanley raised its price target on the precious metals miner to 920p from 870p but warned that the risk-reward profile has turned unfavourable following a steep re-rating this year.

“While the bank said the backdrop for silver has substantially improved, it added that Fresnillo shares now appear to be pricing in a silver price of over $40/oz through perpetuity. 

According to Morgan Stanley, this leaves little valuation safety buffer.

While the firm acknowledged stronger fundamentals in the silver market, it argued that the current valuation leaves limited room for upside and increases downside risk. 

As a result, Morgan Stanley prefers to wait for a better entry point, where it expects a more favourable upside skew.

Fresnillo, one of the world’s largest silver producers, has been a significant beneficiary of this year’s rally in precious metals. However, the downgrade signals that further gains may require even stronger silver prices or improved fundamentals not yet reflected in the market.

The miner is expected to report its interim results next month.