Fresnillo PLC (LSE:FRES) remains a top pick at JPMorgan, which says the recent surge in gold and silver prices reinforces the case for further upside, despite the stock’s strong run.
Gold and silver jumped sharply at the start of the week, rising 2% and 7% respectively, after renewed geopolitical tensions around Iran and fresh uncertainty over US monetary policy.
Both metals pushed to new record highs, defying expectations that index rebalancing might weigh on silver in the near term.
JPM says the move strengthens its long-term bullish view on precious metals. The bank continues to argue for structurally higher gold prices, driven by geopolitical risk, central bank buying and persistent inflation concerns.
That backdrop is seen as particularly favourable for gold and silver miners.
For Fresnillo, JPM outlines three reasons to stay overweight, even after the shares have risen about 460% over the past year.
First, it estimates the stock still trades around 40% below spot fair value based on current metal prices. Second, it sees scope for 40% to 70% upgrades to earnings forecasts over 2026 to 2028 as higher prices feed through.
Third, it argues that a re-rating to a higher valuation multiple could unlock more than 60% additional upside.
Taken together, the bank says this creates a clear pathway to much higher share prices over time, with its target price set at 4,300p.
In JPM's view, recent market moves are not a reason to take profits, but further evidence that the long-term bull case for Fresnillo remains firmly intact.