Is It Too Late To Consider Lundin Mining (TSX:LUN) After Its 1-Year Share Price Surge?

• If you are wondering whether Lundin Mining shares still offer value or if the excitement is already priced in, you are in the right place.
• The stock last closed at C$34.80, with returns of 4% over 7 days, 17.1% year to date, 185.6% over 1 year, 325.5% over 3 years and 168.5% over 5 years. This raises fair questions about what is already reflected in the price.
• Recent news coverage has focused on Lundin Mining’s position within the broader materials sector and how investors are reacting to changes in commodity sentiment and project updates. This context helps explain why the share price performance over multiple time frames has drawn increased attention from both existing and potential shareholders.
• Simply Wall St currently gives Lundin Mining a valuation score of 0 out of 6. We will walk through what different valuation approaches say about the stock and then finish with a way to think about value that goes beyond any single model.

Lundin Mining scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Lundin Mining Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and discounts them back to today using a required rate of return, to estimate what the entire business might be worth on a per share basis.

For Lundin Mining, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is $471.0 million. Analysts have provided free cash flow estimates out to 2030, with Simply Wall St extrapolating further years beyond the analyst horizon. Within those projections, individual years can be positive or negative, for example $666.96 million in 2026 and $225.25 million of outflow in 2028, reflecting the lumpier nature of mining cash flows.

On this basis, the DCF model arrives at an estimated intrinsic value of $18.14 per share. Compared with the recent share price of C$34.80, the DCF output suggests the stock is around 91.9% overvalued using this specific set of cash flow assumptions and discounting.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Lundin Mining may be overvalued by 91.9%. Discover 5 high quality undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Lundin Mining.

Approach 2: Lundin Mining Price vs Earnings (P/E)

For a profitable company like Lundin Mining, the P/E ratio is a useful way to think about value because it links what you pay today to the earnings the business is already generating. In general, higher growth expectations or lower perceived risk can justify a higher P/E, while lower growth or higher risk usually point to a lower, more conservative P/E being reasonable.

Lundin Mining is currently trading on a P/E of 103x. That compares with an average of about 25x for the Metals and Mining industry and a peer average of 25.16x, so the stock is pricing in much stronger expectations than those broad benchmarks suggest.

Simply Wall St’s Fair Ratio for Lundin Mining is 38.61x. This is a proprietary estimate of what a “normal” P/E could look like for the company after considering factors such as earnings growth, profit margins, industry, market cap and specific risks. Because it is tailored to the company, the Fair Ratio can often be more informative than a simple comparison with peers or the industry, which may differ in size, quality or risk.

Compared with the Fair Ratio of 38.61x, the current P/E of 103x suggests Lundin Mining shares are trading above this indication of fair value.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Lundin Mining Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a tool on Simply Wall St’s Community page that lets you connect your view of Lundin Mining’s story to a set of explicit forecasts for revenue, earnings and margins. These then flow through to a fair value you can compare with the current price to help decide whether the stock looks attractive or stretched. The tool automatically updates as fresh news or earnings arrive, so you can see, for example, how one investor might build a more optimistic Lundin Mining Narrative around assumptions similar to the higher CA$32.48 fair value, while another might anchor a more cautious Narrative closer to the CA$21.11 fair value. This gives you a clear range of reasoned perspectives rather than relying on a single static model.

Do you think there’s more to the story for Lundin Mining? 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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