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On Wednesday, JPMorgan analysts reiterated an Overweight rating for Antofagasta (LON:ANTO) Plc. stock, maintaining a price target of £24.00. The decision follows improvements in the company’s outlook despite ongoing macroeconomic and trade uncertainties.
Copper prices have rebounded to levels near those before Liberation Day, while gold prices, a significant byproduct for Antofagasta, have increased by 8%. At the same time, cost inputs such as oil and treatment charges have weakened. JPMorgan’s commodities team forecasts modest surpluses in the copper market for 2025 and 2026, but expects a shift to a deficit starting in 2027, potentially reaching over 3 million tons by 2030.
Antofagasta is projected to achieve copper growth of 15% to 30% by 2027 and 2028 compared to 2024, surpassing its global copper peers. This growth is anticipated to drive a de-rating of the company’s enterprise value to EBITDA from approximately 9 times in 2025 to around 5 times in 2028. The company’s free cash flow yield is expected to shift from -3% in 2025 to +7% in 2028.
Risks to Antofagasta’s 2025 copper output guidance have diminished following the approval of the Zaldivar Environmental Impact Assessment. With strong gold prices and weaker cost inputs, there is potential for the company to reduce its cash cost guidance, and JPMorgan’s forecasts now exceed the 2025 EBITDA consensus by 6%.
Antofagasta has been placed on JPMorgan’s Positive Catalyst Watch ahead of its second-quarter production results, scheduled for release on July 16. The analysts have revised their group EBITDA forecasts for 2025 and 2026, increasing them by 5% and 1%, respectively.
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