Britain is not the only country having an election- Mexico is too and JP Morgan believes the outcome might be closer than expected with implications for miner Fresnillo PLC (LSE:FRES).
Recent poll data suggests Claudia Sheinbaum, the presidential candidate for the Morena coalition, is leading the polls comfortably.
Although the market has factored in continuity with a Morena win (alongside majorities in Congress), a narrower victory could be less negative for miners or pose potentially less negative implications for mining investment compared to previously.
Based on this more favourable outcome from the June 2 election, silver and gold miner Fresnillo was raised to overweight in April.
Add in the strong rise recently in both the gold and silver price and Fresnillio offers 20% earnings upside on spot prices between now and 2026.
“With FRES trading on 5.0x/4.4x spot 2024/25E EV/EBITDA vs its mid-cycle average of ~8x, we remain OW," said JPM.
Among EMEA Gold Miners, JP Morgan is also overweight on AngloGold & Hochschild Mining due to an increase in its long-term gold price forecast to $1,800/oz (prev $1,600/oz).
Shares in Fresnillo rose by 1.8% to 625p on Wednesday.