The US investment bank has a 900p target price on the FTSE 100-listed stock which was trading at 868.40p in early afternoon trading, up 2.2% on Monday’s close.
In a big note to clients on the European Metals & Mining sector, Morgan Stanley’s analysts said: “We still see regulatory issues for Fresnillo and other miners in Mexico, although the speed of implementation of change looks slower, and the short-term risks appear lower than we previously assumed.”
They added: “We therefore upgrade Fresnillo back to Equal-weight, with risk/reward fairly balanced here.
“At 8.6x EV/EBITDA on our base case, the stock is down from 14x+ back in 2017. FCF yield remains muted at 1.2% in 2019e, but not out of sync with history.”