The timing appears opportune to go long in shares of Fresnillo plc as we anticipate another pick-up in the underlying trend.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● Overall, and from a short-term perspective, the company presents an interesting fundamental situation.
● The company has a good ESG score relative to its sector, according to MSCI.
Strengths
● The company's profit outlook over the next few years is a strong asset.
● The company's EBITDA/Sales ratio is relatively high and results in high margins before depreciation, amortization and taxes.
● The company returns high margins, thereby supporting business profitability.
● Thanks to a sound financial situation, the firm has significant leeway for investment.
● The company has a low valuation given the cash flows generated by its activity.
● Over the past year, analysts have regularly revised upwards their sales forecast for the company.
● Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.
● For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
● For the last few months, EPS revisions have remained quite promising. Analysts now anticipate higher profitability levels than before.
● Consensus analysts have strongly revised their opinion of the company over the past 12 months.
Weaknesses
● The average consensus view of analysts covering the stock has deteriorated over the past four months.
● Sales estimates for the next fiscal years vary from one analyst to another. This clearly highlights a lack of visibility into the company's future activity.
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Fresnillo plc specializes in exploring and producing precious metals. Net sales break down by family of products as follows:
- silver (46%): 56.3 million ounces produced in 2024. The group is the world's leader of primary silver;
- gold (41.6%): 631,573 ounces produced. Fresnillo plc is Mexico's No. 2 gold producer;
- zinc (8.6%): 116,646 tons produced;
- lead (3.8%): 66,400 tons produced.
At the end of 2024, the group had 7 mines located in Mexico (Fresnillo, Ciénega, Herradura, Saucito, Noche Buena, Juanicipio, and San Julián).
This super rating is the result of a weighted average of the rankings based on the following ratings: Global Valuation (Composite), EPS Revisions (4 months), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Investor
Investor
This super composite rating is the result of a weighted average of the rankings based on the following ratings: Fundamentals (Composite), Global Valuation (Composite), EPS Revisions (1 year), and Visibility (Composite). We recommend that you carefully review the associated descriptions.
Global
Global
This composite rating is the result of an average of the rankings based on the following ratings: Fundamentals (Composite), Valuation (Composite), Financial Estimates Revisions (Composite), Consensus (Composite), and Visibility (Composite). The company must be covered by at least 4 of these 5 ratings for the calculation to be performed. We recommend that you carefully review the associated descriptions.
Quality
Quality
This composite rating is the result of an average of the rankings based on the following ratings: Capital Efficiency (Composite), Quality of Financial Reporting (Composite), and Financial Health (Composite). The company must be covered by at least 2 of these 3 ratings for the calculation to be performed. We recommend that you carefully review the associated descriptions.
ESG MSCI
ESG MSCI
The MSCI ESG score assesses a company’s environmental, social, and governance practices relative to its industry peers. Companies are rated from CCC (laggard) to AAA (leader). This rating helps investors incorporate sustainability risks and opportunities into their investment decisions.
