FTSE 100

How has the Fresnillo share price performed versus its FTSE 100 sector peers?

In the past year, the Fresnillo share price (LON: FRES) (FRES.L) has risen by 50%. There are six other companies in the FTSE 100 (INDEXFTSE: UKX) mining sector, with them all having delivered positive capital returns over the last year.

In fact, out of the FTSE 100 mining sector’s members, only Polymetal has underperformed Fresnillo in the past year. Its return in that time is 30%. Meanwhile, mining stocks BHP and Rio Tinto have delivered 85% and 74% returns, respectively, in the past 12 months. The strongest returns in the sector have been from Glencore, Anglo American and Antofagasta. Their share prices are up 142%, 150% and 170% respectively over the past year.

Fresnillo latest news

In terms of the latest Fresnillo share price news, the company released full-year results for the 2020 financial year on 2 March 2021. They showed stable silver production versus the previous year at 53.1 million ounces. This was within the firm’s production guidance. However, its gold production fell by 12.1% to 769.6 thousand ounces as a result of Covid-19 restrictions that caused shutdowns and a reduced workforce for part of the year.

Lower production volumes for gold were more than offset by higher precious metals prices in the 2020 financial year. The company was therefore able to report a 14.9% rise in revenue versus the prior year, while its gross profit increased by over 90%. Profitability benefitted from higher prices, as well as lower costs.

Fresnillo updated investors on the progress being made in its development projects in its full-year results. For example, it completed the first production stope at Juanicipio as expected in the third quarter. Although commissioning of the plant has been delayed until the final quarter of 2021 due to Covid-19 delays, it is still expected to form a key part of the firm’s long-term silver production. The company also completed the construction of the new Pyrites Plant at the Fresnillo mine in the fourth quarter.

Fresnillo share price prospects

Analysts are currently forecasting an 80% rise in the company’s earnings per share in the current year. The consensus then expects an increase in the firm’s bottom line of around 16% in 2022. Using this year’s forecast and the Fresnillo share price of 931p, the firm currently has a forward price-earnings ratio of around 16.

In terms of dividends, the analyst consensus expects dividends per share of 27.7p this year and 32.2p next year. This means that the stock has a forward dividend yield of 3% this year and 3.5% next year, according to analyst forecasts. The firm’s next investor update is due to take place on 28 April 2021, when it is expected to release its production update for the first quarter of the 2021 financial year.

Not Investment Advice Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.