RBC upgrades Antofagasta to 'sector perform'

RBC said as inventories remain low and risks around smelter curtailments grow, copper price risk was to the upside, for now., noting that rouble remained on the horizon both operationally and with Chilean taxes/politics.

However, in the near term, RBC sees Antofagasta's 85% R2 with copper prices acting to offset this.

"Although we continue to see Antofagasta's challenges as elevated in the coming months, we also now see the potential that investors may be able to opine on these risks from a higher share price position," said RBC.

The Canadian bank highlighted that at spot prices and currencies, it would value Antofagasta at 1,900.0p, although it noted this also takes into account no discounts for any tax changes.

"We increase our target multiples to 7.5 EV/EBITDA and 1.1x NAV (from 6.0x EV/EBITDA and 1.0x NAV) to account for copper price optionality and improved relative positioning and this moves our target price to 1,350.0p from 1,150.0p," concluded RBC.