Hochschild Shares (LON:HOC) Retest 300 – Analyst Price Targets Shifting

Hochschild Mining shares (LON:HOC) have reversed track this week, gaining 5.91% today and retesting the 300p level, after having fallen more than 5% last week, as revised production guidance and increased cost projections triggered a series of price target reductions from leading financial institutions.

The pullback reflects market apprehension regarding the miner's near-term operational outlook, despite a solid year-to-date performance. Hochschild's share price continues to trade 34% higher than where they began the year, outperforming broader markets, including the FTSE 100 (+11.3%) on the same period.

The share price movement follows Hochschild's announcement of a revised 2025 production guidance, primarily due to operational challenges at its Mara Rosa gold mine in Brazil. Persistent heavy rainfall has hampered remedial efforts, leading to a significant downgrade in the production forecast for this key site. This issue compounded concerns already brewing after the company projected higher operating costs for the coming years.

Specifically, the all-in sustaining cost (AISC) for 2025 is now expected to fall within a range of $1,587 to $1,687 per ounce, exceeding previous estimates. The company attributes this escalation to a confluence of factors, including inflationary pressures, unfavorable currency fluctuations, and increased capital expenditures across its mining sites. The combination of reduced production expectations and increasing cost forecasts has weighed heavily on market sentiment.

Several analysts have responded by adjusting their price targets for Hochschild Mining in the past week.

JPMorgan analyst Patrick Jones lowered the firm's price target to 370 GBp from 390 GBp, while maintaining an “Overweight” rating.

Canaccord Genuity reduced its price target from 365 GBp to 350 GBp, retaining a “Buy” rating.

Berenberg Bank decreased its price target from 300 GBp to 280 GBp, continuing to assign a “Hold” rating.

Despite these headwinds, Hochschild reported a 27% increase in profits to $225 million, bolstered by strong performances from other Latin American operations and favorable gold prices. This positive result highlights the uneven performance across the group's portfolio.

The recent share price decline underscores the market's sensitivity to production setbacks and cost inflation within the mining sector. While some analysts maintain a positive long-term outlook, citing the company's diverse portfolio and favorable precious metals market conditions, the immediate focus remains on Hochschild's ability to manage costs and restore production levels at the Mara Rosa mine.