Barclays downgrades Anglo American to 'equal weight'

Anglo American

2,446.00p

08:25 07/11/24

2.26%

54.00p

Analysts at Barclays downgraded multinational mining company Anglo American to 'equal weight' and lowered their target price on its shares from 3,600.0p to 2,700.0p on Monday, stating there appeared to be "turbulence ahead" for the group.

FTSE 100

8,175.41

08:25 07/11/24

n/a

FTSE 350

4,508.74

08:25 07/11/24

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FTSE All-Share

4,466.34

08:25 07/11/24

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Mining

11,343.72

08:25 07/11/24

-1.30%

-149.16

Barclays said the collapse in iron ore, lump premiums and platinum group metal prices left Anglo American in-line with peers on a spot one-year forward price-to-earnings ratio, close to the widest P/E premium and narrowest sum-of-the-parts discount for the stock in five years.

The bank also highlighted that it was concerned that an air pocket in PGM demand triggered by chip shortages could last longer than the market assumes.

"We lower our PGM price deck by ~28% for '22 (EPS -19%). Along with our 'lower for longer' iron ore view, this leads us to downgrade AAL to EW ahead of what could prove a turbulent 6-12 months. We lower our PT by 25% to £27 based on 0.95x NPV (1.15x prev) to reflect these risks," said the analysts.