LONDON (ShareCast) - (Sharecast News) - Analysts at Bank of America lowered their target price for shares of precious metals miner Fresnillo but reiterated their 'buy' recommendation following the outfit's latest interim figures.
They were now more cautious on the company's cost profile and lowered their estimate for Fresnillo's operating profits in 2022.

Hence their reduced target price of 810.0p, which was down from 920.0p beforehand.

However, they expected weakness in Fresnillo's sales relative to its output to at least partially reverse, arguing that it was likely to prove the result of a temporary timing effect.

The analysts also highlighted how the ramp-up of its Juanicipio joint-venture should deliver years of "bonanza" in the form of "very high grade" ore driving production growth, although connection of the processing plant to the local grid had been delayed by roughly six months.

Development of the Rodeo and Orisyvo exploration projects might also drive future volume growth, although they remained outside their model pending successful feasibility studies.

On the downside, a fifth wave of Covid-19 had now reached Mexico and as per the company itself there was a higher risk of Covid-19 related absenteeism in the back half of the year.

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