Fresnillo PLC Fair Value: FRES at £24.42 Offers 33% Upside

Fresnillo PLC Fair Value Analysis: Why FRES Looks Undervalued

Fresnillo PLC (LSE: FRES), Mexico’s largest silver producer and a significant gold miner, currently trades at GBP 24.42. Our independent fair-value estimate stands at GBP 32.6, implying 33.5% upside, while the stock earns a Quality Score of 73/100. The verdict from our multi-model framework: undervalued.

What Fresnillo Does

The company operates seven mines across Mexico, focusing on underground silver and gold extraction with by-product lead and zinc. Its portfolio includes the world-class Fresnillo and Saucito mines, plus the Herradura and Noche Buena gold operations. In 2025 Fresnillo delivered record financial performance, with adjusted revenues rising 27.6% to US$4.6 billion and EBITDA surging 80.7% to US$2.8 billion, driven by higher precious-metals prices and operational consistency.

Recent Operational and Financial Context

The 22 July 2026 Q2 production report showed silver output of 10.9 million ounces (down 1.7% year-on-year) while gold production rose 13.8% to 154,812 ounces. Full-year 2025 silver production met guidance and gold exceeded it. Fresnillo ended 2025 with a net cash position of US$1.9 billion and has since acquired Probe Gold, further bolstering its growth pipeline. Interim results for the first half of 2026 are due on 4 August.

Why Our Models See 33.5% Upside

Our fair-value calculation blends discounted cash flow, relative multiples and asset-based approaches tailored to the mining sector. Key positive drivers include:

• Strong free-cash-flow generation at current silver and gold prices.
• A fortress balance sheet with substantial net cash and a generous dividend policy (US$950 million distributed for 2025).
• Stable production guidance for 2027–2028 and scope for cost discipline in a high-price environment.

These factors are not fully reflected in the current share price, resulting in the identified undervaluation.

Check Fresnillo PLC’s latest fair value yourself using the free Fair Value Calculator and compare it against 21 other valuation models plus the Quality Score.

Key Risks to Consider

Commodity prices remain the dominant swing factor; any sustained pullback in silver or gold would pressure margins. Operational risks in Mexico, including labour relations, security and regulatory changes, are perennial concerns for the sector. Cost inflation and potential delays in new projects could also weigh on returns. Our Quality Score of 73/100 already incorporates these elements.

Balanced Verdict

Fresnillo PLC offers compelling value for investors comfortable with precious-metals cyclicality and Mexico-specific risks. The combination of record earnings, a net-cash balance sheet and attractive dividend yield supports our fair-value estimate of GBP 32.6. At GBP 24.42 the stock screens as undervalued on our framework, but position sizing should reflect individual risk tolerance. This is educational analysis only and not financial advice.

Frequently Asked Questions

Is Fresnillo PLC a good investment in 2026?

Our analysis shows Fresnillo PLC is undervalued at the current price with 33.5% upside to fair value, supported by robust cash generation and a strong balance sheet, though investors should weigh Mexico operational risks and commodity price volatility.

What drives Fresnillo’s valuation?

Key drivers include silver and gold production volumes, realised metal prices, operating costs in Mexico, and the company’s net cash position, all of which feed into our multi-model fair-value framework.

When will Fresnillo release its next results?

Fresnillo is scheduled to announce its first-half 2026 interim results on 4 August 2026, following the recently published Q2 2026 production report.

Sources

Context gathered via live web search while writing this article:

• https://www.fresnilloplc.com/investors/investors-and-shareholder-information/financial-calendar/
• https://www.investegate.co.uk/announcement/rns/fresnillo--fres/preliminary-results/9454730
• https://br.advfn.com/noticias/LSEG_RNS/2026/artigo/98958874
• https://www.fresnilloplc.com/investors/reports-and-presentations/
• https://www.fresnilloplc.com/investors/