Citi lowers target price on Anglo American

Analysts at Citi lowered their target price on metals miner Anglo American on the back of the company’s latest production guidance for fiscal year 2015.

When compared with the broker’s previous forecasts, that implied lower volumes for diamonds and iron ore but better ones for base metals.

Nonetheless, the now lower projections for 2015 meant Citi now had to lower its production estimates for the company in 2016.

The research team led by Heath Jansen also updated their model to account for higher costs, especially at Kumba (due to higher stripping), its Johannesburg-listed iron ore miner.

Their estimate for Anglo American’s earnings per share in 2015 remained flat at 83 US cents, while that for 2016 was cut to 38 US cents from 46 US cents.

The broker also lowered its target price to 600p from 650p, albeit keeping its neutral/high-risk recommendation intact.

As of 11:02 shares in the mining group were up 0.48% to 612.8p.