- For investors considering whether Compañía de Minas BuenaventuraA is still reasonably priced after its strong run, this article looks at what the current share price might be implying about the stock's value.
- The stock recently closed at US$36.41, with returns of 12.2% over the last 7 days, a 6.1% decline over 30 days, 27.4% year to date and 155.5% over the past year, as well as a very large gain over 3 years and 262.6% over 5 years.
- Recent trading has been influenced by ongoing investor interest in precious and base metals producers, as well as company specific updates relating to its mining portfolio and operations. These factors help explain why the share price has experienced both sharp short term moves and strong multi year returns.
- On Simply Wall St's six point valuation framework, Compañía de Minas BuenaventuraA currently scores 3 out of 6. The rest of this article will break down what different valuation approaches indicate about that score and introduce a broader way to think about value that will be covered at the end.
Approach 1: Compañía de Minas Buenaventura A Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model estimates what a company could be worth by projecting its future cash flows and discounting them back to today using a required rate of return. It focuses on cash that could theoretically be available to shareholders over time.
For Compañía de Minas BuenaventuraA, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about $87.5 million. Analysts provide explicit forecasts for the next few years, and Simply Wall St then extrapolates these further out. Under these assumptions, projected Free Cash Flow reaches about $965.2 million in 2035, with each year between 2026 and 2035 contributing discounted cash flows that build the valuation.
Putting these projections together gives an estimated intrinsic value of about $35.99 per share. Compared with the recent share price of $36.41, the DCF suggests the stock is roughly 1.2% overvalued, which is a very small gap relative to the price.
Result: ABOUT RIGHT
Compañía de Minas BuenaventuraA is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.
Approach 2: Compañía de Minas BuenaventuraA Price vs Earnings
For profitable companies, the P/E ratio is a useful way to think about value because it ties the share price directly to the earnings that each share represents. In simple terms, it shows how many dollars investors are currently willing to pay for one dollar of earnings.
What counts as a "normal" or "fair" P/E depends on how the market views a company’s growth potential and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk can point to a lower P/E.
Compañía de Minas BuenaventuraA currently trades on a P/E of 11.69x. This is below the Metals and Mining industry average P/E of 22.00x, and also below a peer group average of 28.82x. Simply Wall St’s proprietary Fair Ratio for Compañía de Minas BuenaventuraA is 18.06x, which reflects factors such as earnings growth expectations, industry, profit margins, market capitalization and company specific risks.
This Fair Ratio aims to give a more tailored view than a simple comparison with peers or the broad industry, because it adjusts for the company’s own growth profile, risk characteristics and size. Comparing the Fair Ratio of 18.06x with the current P/E of 11.69x suggests the stock may be undervalued on this metric.
Result: UNDERVALUED
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Upgrade Your Decision Making: Choose Your Compañía de Minas Buenaventura Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives let you turn your view of Compañía de Minas Buenaventura into a simple story that links assumptions about future revenue, earnings and margins to a forecast and then to a fair value, all within the Simply Wall St Community page that millions of investors use. Because these Narratives refresh when new information such as project updates or earnings arrives, you can quickly compare your own fair value with the current share price to help decide whether BVN looks attractive or expensive based on your chosen story, whether that is a more optimistic path that lines up with a higher fair value such as US$42.0 or a more cautious view closer to US$24.0.
For Compañía de Minas BuenaventuraA, we will make it really easy for you with previews of two leading Compañía de Minas BuenaventuraA Narratives:
🐂 Compañía de Minas BuenaventuraA Bull Case
Fair value in this bullish narrative: US$36.98
Implied pricing gap versus the recent US$36.41 close: about 1.5% below that fair value.
Revenue growth assumption: 5.75% a year.
- Analysts frame the story around higher gold and copper output, with San Gabriel and El Brocal supporting a broader mix of metals and cash flow sources.
- Cost control, capital discipline and improved contract terms are central, with an emphasis on margins, cash generation and balance sheet strength.
- The narrative flags execution, cost inflation, capital intensity and commodity price swings as key risks that could challenge earnings and valuation if they do not break in the company’s favor.
🐻 Compañía de Minas BuenaventuraA Bear Case
Fair value in this bearish narrative: US$24.00
Implied pricing gap versus the recent US$36.41 close: about 34% above that fair value.
Revenue growth assumption: 8.90% a year.
- The cautious view leans on execution risk at San Gabriel, from permits to commissioning and tailings management, as a key swing factor for volumes, costs and cash flow.
- Lower recent copper, silver and gold volumes, along with higher commercial and operating costs, are treated as potential constraints on EBITDA and net margins if they persist.
- This narrative assumes that even with revenue growth, margin compression and valuation multiples could leave the share price ahead of what more conservative earnings paths might support.
Whichever narrative feels closer to your own assumptions, the key step now is to compare your expectations for volumes, costs and metals prices with these two bookends. Decide where your fair value range sits relative to the current share price, then use that to guide your next move on the stock.
Curious how numbers become stories that shape markets? Explore Community Narratives
Do you think there's more to the story for Compañía de Minas BuenaventuraA? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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