Gold miners: why there’s still plenty of upside in the sector... and why Fresnillo is the standout

After a strong run for precious metals, gold mining shares still look undervalued.

That’s the view from JPMorgan’s latest take on EMEA-listed producers, which argues there’s room for substantial upside, especially if the firm’s bullish forecast for the gold price proves right.

JPMorgan’s commodities team is pencilling in a gold price of $4,100 an ounce for 2026.

That’s well above current spot levels and would represent a new all-time high.

Based on that estimate, JPM sees around 40–50% upside to average analyst expectations for earnings before interest, tax, depreciation and amortisation (EBITDA) across the sector.

More strikingly, share prices could rise by 60–100% if those assumptions play out, according to the bank’s calculations.

So where is the best value?

Fresnillo: top pick for a reason

JPMorgan’s top choice is Fresnillo PLC (LSE:FRES), which it rates as "overweight", essentially a buy recommendation.

The stock trades on a modest 5 to 5.5 times enterprise value to EBITDA (EV/EBITDA), a common valuation metric that compares a company’s market value, including debt to its earnings. Lower multiples suggest cheaper valuations.

The American also points out that Fresnillo offers an 8% free cash flow yield, meaning it generates cash worth 8% of its market value, a healthy return by any standard.

That level of cash generation should give the company ample flexibility to invest in new projects, return capital to shareholders, or reduce debt.

The recent move by Pan American Silver to buy out Fresnillo’s joint venture partner at around 10 times EV/EBITDA makes Fresnillo’s current valuation look even more attractive.

In other words, buyers in the industry are willing to pay a lot more than the market currently is. That points to meaningful upside if sentiment turns.

Hochschild: volume growth and a re-rating story

Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF) is also rated overweight. While the shares have been volatile, JPM sees it as a multi-year holding.

The appeal lies in volume growth (output is expected to increase by over 50% by 2028) and the fact that Hochschild is less geographically concentrated than it used to be, with assets now spread across Peru, Brazil and Argentina.

On 2026–27 forecasts, the stock trades on less than three times EV/EBITDA, which is low by industry standards and offers significant room for re-rating if the growth materialises.

AngloGold: value uplift from reserve upgrade

AngloGold Ashanti (ASX:AGG) has also earned a place on JPMorgan’s recommended list.

The analysts recently upgraded their net present value (NPV) for the company by 20%, following updates to its reserves and mine plans. As a result, they lifted their price targets to $58 per share in New York and ZAR1,096 in Johannesburg, both implying around 35% upside from current levels.

In summary

Gold prices have strengthened, but mining shares have not fully followed. JPM’s analysis suggests there’s still time to catch the updraft, especially for producers like Fresnillo that offer strong cash flow, low valuations and rising production.

If gold does reach the $4,100 level by 2026, the rerating potential across the sector is significant.