Fresnillo Shares Drop Despite Dividend Increase

Despite unveiling a dividend increase, Fresnillo saw its shares retreat 5.6% during the April 18 session, hitting an intraday low of 1,007 GBX (US$13.39) before settling at 1,021 GBX (US$13.58). Trading volume also took a hit, with just 1.2 million shares changing hands, well below the daily average of 3.3 million. The decline suggests investor sentiment remains cautious, even as the company signals financial strength. Analysts offered mixed reviews, reflecting uncertainty over the miner’s near-term performance.

The Royal Bank of Canada maintained a conservative stance with a “Sector Perform” rating and a target price of 880 GBX, implying limited downside. Canaccord Genuity echoed caution, raising its target to 805 GBX while keeping a “Hold” recommendation. In contrast, Berenberg Bank expressed growing confidence in Fresnillo, upgrading the stock to “Buy” and setting a target of 1,020 GBX, almost matching Friday’s close. Still, the broader analyst consensus remains neutral, with an average price target of 824 GBX and a prevailing recommendation to “Hold,” underscoring moderate expectations for short-term gains.

Amid market skepticism, Fresnillo announced a significant dividend increase, offering US$0.68 per share to investors on record by April 17, with payment scheduled for May 30. This marks a rise from the previous US$0.06 payout, translating to a 5.49% yield. The move highlights robust cash generation and reflects management’s confidence in the company’s long-term financial health, even as external market factors weigh on the share price.