It gives the stock a target price of 44 pence-a-share -around a 16% increase on the current price of 38 pence.
Notably, analyst Martin Potts said the first sale of rubies from the group's Montapuez project, its next producing asset, is expected before the end of June, which will set an initial value for the project and create an opportunity for a re-rating of the shares.
"There is further mining upside from the 50% interest in an amethyst mine and a portfolio of exploration assets in Madagascar, which is considered to be prospective for emeralds, rubies, sapphires, tourmalines and garnet," he added.
The acquisition of the Fabergé brand offered the opportunity to add further value to the gemstones by promoting them in a similar way to the link between De Beers and diamonds, he said.
The business, which has Mila Kunis as a brand ambassador, is now focused on re-establishing itself as a luxury goods brand with a focus on marketing jewellery containing gemstones sourced mainly from the firm's mines.
Sales are rapidly increasing, with Christmas 2013 revenue up 89% compared to the same period in 2012. Gemfields anticipates that Fabergé should return to profit in 2016, noted Potts.
"We see no major risks to the business. Zambia and Madagascar are two of Africa’s more stable countries, both of which have a recent history of attracting mine development.
"The company has a strong balance sheet with virtually no debt and should easily be able to finance the proposed capital projects."
He added that at "some point in the not too distant future, it will be in a position to consider returning cash to shareholders."