RBC ups target price on Fresnillo

Shares in Fresnillo were moving higher after analysts Tyler Broda and Alexandra Slattery at RBC bumped their target price on the stock from 610p to 750p, albeit while downgrading their recommendation from 'sector perform' to 'underperform'.

"Even following our increase in gold price forecasts (silver remains the same) with coming execution risks around San Julien and Fresnillo, we cannot justify the current share price on valuation grounds," they said.

Nonetheless, the company is "very strong", thanks to its asset portfolio, costs position, growth potential and balance sheet, they said.

The analysts also pointed out the miner's high-margin, long-life assets, along with the signifcant growth optionality inherent in the later.

"But following recent share price appreciation and elevated execution risks over the coming 12 months we expect the shares to underperform over the coming 12 months," Broda and Slattery added.

Acting as a backdrop, RBC lifted its target for the price of gold in 2016 to $1,250 per ounce and for the long-term to $1,300 per ounce. Its projection for the long-term price of silver was kept at $17.50 per ounce.