Berenberg sees plenty of upside at Antofagasta, starts at 'buy'
By Benjamin Chiou
Date: Thursday 03 Apr 2025
(Sharecast News) - Berenberg has kicked off coverage of Antofagasta with a 'buy' rating, highlighting the "pure-play" benefits of the copper miner which offers "compelling" growth potential.
The broker initiated its coverage with a 2,100p target for Antofagasta's share price, representing 25% upside to current levels.
Pure-play copper businesses trade at a premium valuation multiple to their diversified peers, Berenberg said, due to the attractiveness of the copper investment case. What's more, Antofagasta offers "sector-leading EBITDA margins", it said.
"Antofagasta is a FTSE-100-listed pure-play copper miner, which is a rarity, as other miners with copper exposure tend to be diluted by other metals with less compelling market dynamics, and it thus commands a premium multiple," Berenberg said in a note on Thursday.
The broker hailed the miner's Chilean asset base potential, with volumes expected to grow from around 680,000 tonnes in 2025 to 900kt by 2028, helped by the second concentrator project at Centinela and improved grades at its Los Pelambres mine.
"Costs also remain competitive, with c80% of its production sitting in the first quartile of the copper cost curve, and scope for a beat versus cost guidance due to strong by-product prices (ie gold)," Berenberg said.
The broker also said that the market is underestimating Antofagasta's 18.94% stake in Peruvian miner Buenaventura, which provides a lot of upside despite the latter's shares having surged by 56% since the former first invested in 2023.
Antofagasta shares were down 5% at 1,602.5p by 1109 GMT, along with the rest of the mining sector as global financial markets reacted to launch of far-reaching US import tariffs.
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