RBC Capital downgrades Fresnillo as capex profile weighs on equity

24th Aug 2015 15:20

(ShareCast News) - RBC Capital has slashed its rating for Fresnillo to 'sector perform' from 'outperform' and lowered its price target to 700p from 800p.The bank said while the Mexican metals company reported a good set of interim results, its spending plans could weigh on equity."Whilst the company reported an in line first half we believe that the current growth profile in a weaker commodity price environment could result in a deterioration of the balance sheet," RBC analyst Jonathan Guy said in a note to clients.RBC believed the company may need US$350m for additional funding in 2016, which the bank assumed would be raised through debt."We have updated our forecasts to reflect the changes that we have made to our commodity price deck," RBC said.Shares in Fresnillo were down by 3.96% to 654.50p at 1536 BST.