Scotiabank (BNS) lowered its price target on Hecla Mining (HL) to $21 from $25 on Tuesday, maintaining a Sector Perform rating. The $4 reduction slashes approximately $2.68 billion from the broker's projected equity value, representing about a quarter of Hecla's $10.4 billion market capitalization.
The move comes despite Scotiabank raising its silver price outlook in the same research note. The bank increased its target on Coeur Mining (CDE) by 3.6% to $28.50 and only trimmed First Majestic Silver (AG) by 2.2% to $22.50, suggesting Hecla's challenges are company-specific rather than sector-wide.
Hecla shares ended Tuesday at $15.46, down 2.8% on the day, with trading volume of 38.38 million shares—about 1.84 times the 65-day average. The stock's close implies 35.8% upside to the new target, down from 61.7% under the previous target, a decline of 25.9 percentage points despite the unchanged rating.
Scotiabank analyst Eric Winmill left his Sector Perform rating unchanged, indicating expectations of returns in line with the broader sector. The bank now anticipates a "more hawkish environment" for gold through 2027 but raised its silver outlook. No detailed public explanation was provided for the disproportionate cut to Hecla's target.
Production data offers clues to the bank's caution. Hecla's first-quarter silver output of 3.9 million ounces represents just 23.6% to 25.8% of its full-year guidance range of 15.1 million to 16.5 million ounces. To hit the midpoint of 15.8 million ounces, the miner must average 3.97 million ounces per quarter for the remainder of the year—slightly above Q1's actual production.
Hecla's balance sheet provides some flexibility. CEO Rob Krcmarov stated in May that the company is "debt-free with a $225 million undrawn revolver" after paying off its last senior notes, with $144 million in first-quarter cash reported.
Operations at the Keno Hill mine in Canada's Yukon territory remain challenging. First-quarter silver production there fell 18% sequentially, constrained by lower grades and power limitations affecting mine sequencing. Hecla has not yet met its own criteria to include Keno Hill in consolidated silver cost guidance, as regular production has not been established for accounting purposes. Maintaining output at the approved 440 tons per day will require infrastructure upgrades and license modifications, a process expected to take years.
Nearby silver futures dropped 2.8% on Tuesday to settle at $57.11 per ounce, the weakest close since December 4, 2025. Mizuho Securities USA analyst Robert Yawger described silver as "the worst-performing commodity" in a recent note.
The reset could swing either way. A silver price rebound or Hecla achieving the high end of its output range could make the $21 target conservative. However, further weakness in metals prices or additional setbacks at Keno Hill would put even this reduced target at risk.
