JPMorgan double upgrades Antofagasta to 'overweight'
By Michele Maatouk
Date: Wednesday 19 Feb 2025
(Sharecast News) - JPMorgan Cazenove double upgraded Antofagasta on Wednesday to 'overweight' from 'underweight' and hiked the price target to 2,400p from 1,600p citing a positive long-term copper outlook and leading medium-term copper growth.
The bank said its sector view since December 2024 has been that a return to US-China trade tensions could weigh on copper prices & EMEA miners before China stimulus later in the first quarter of 2024 could drive a V-shaped recovery.
JPM said its China economists expect the upcoming 5-8 March National People's Congress meeting could deliver fiscal stimulus, including consumer support, which it believes will be supportive for copper demand and mining equities.
JPM Commodities still forecast the copper market shifting to deficit in 2025, widening to a more than 3Mt deficit by 2030.
The bank said that within EMEA mining, Antofagasta offers +15%/+30% copper growth to 2027/28E versus 2024, which is higher than peers.
"Also, we have revisited our model to incorporate the Los Pelambres & Zaldivar life extension projects to 2050, as well as the latest reserves, which together drive a circa 50% increase to our NPV," it said.
JPM also said that following FY24 results, it has revised its 2025/26 group EBITDA forecasts by +2%/+2% and lifted its price target.
"ANTO trades on spot 9.8x/9.0x 2025/26E EV/EBITDA higher versus its EMEA base metal peers, but more in-line with its larger-scale global copper peers on circa 10x," JPM said. "Thus we double upgrade to OW."
At 1000 GMT, the shares were up 1.6% at 1,865.50p.
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