Fresnillo Shares Downgraded At UBS On Risks Into Q4 Results

Mining firm Fresnillo (LON: FRES) was downgraded to Sell from Neutral at UBS on Thursday, sending its shares lower, although the stock has managed to recover the majority of its losses.

Fresnillo shares closed Thursday at 941.8p, down over 2% after initially hitting a low of 868.8p per share. So far on Friday, the stock has climbed more than 1%, trading around the 932.2p mark.

In a research note, UBS analyst Daniel Major downgraded Fresnillo to Sell from Neutral, cutting his firm's price target on the stock to 850p from 900p.

The analyst said he is constructive on gold and silver but sees risks for the precious metals company into its fourth quarter FY22 results as consensus costs estimations are too low and silver guidance may disappoint.

The UBS re-rating is one of a few downgrades for Fresnillo recently, with the stock downgraded to Sector Perform from Outperform at RBC Capital earlier in January. RBC Capital analyst Marina Calero assigned the stock a 920p price target, down from 1,100p, saying she sees Fresnillo's operational momentum as mostly priced into the shares and limited growth after the ramp-up of Juanicipio.

Furthermore, in December, Peel Hunt downgraded Fresnillo to Hold from Add, with analyst Tim Huff also cutting the firm's price target on the stock to 800p from 770p. The analyst told investors in a note that he sees limited share upside from current levels.

According to Tipranks, out of seven analysts, one has a Buy rating, five have Hold ratings, and one has a Sell rating on Fresnillo shares. The average price target is 928.94p, representing a less than 1% downside from current levels.