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Investing.com -- Antofagasta shares surged Wednesday after JPMorgan analysts double-upgraded the stock to Overweight, citing the miner’s superior medium-term copper growth and a positive long-term outlook for the metal.
While currently up 3.3% at 1,895p (as of 7:30 am ET), the stock initially rallied to 2,098p a share.
JPMorgan noted that Antofagasta (LON:ANTO) offers "15%/+30% copper growth to 2027/28E vs 2024, higher than peers," making it a standout in the sector.
The bank also revised its net present value (NPV) estimate for the company, incorporating the Los Pelambres and Zaldivar life extension projects, leading to a "50% increase" in valuation. As a result, JPMorgan raised its price target to 2,400p per share from 1,600p.
The upgrade comes amid expectations of a tightening global copper market. JPMorgan’s commodities team forecasts that the copper market will shift into deficit in 2025, with the shortfall widening to "more than 3Mt by 2030E."
The analysts project that copper prices could rise to "$11,500/t (~$5.20/lb) by Q2’26, +24% vs the spot price."
Antofagasta’s operational risks, which weighed on production in 2023 and 2024, are also seen as largely resolved.
"Operational setbacks constrained copper output over 2023/24," including issues at the Centinela plant and delays at Los Pelambres, but JPMorgan believes these have been addressed.
The firm sees the company’s 2025 production guidance of 660-700kt as "achievable."
Despite trading at a premium to its European base metal peers, Antofagasta is now valued more in line with "larger-scale global copper peers on ~10x" enterprise value-to-EBITDA multiples, JPMorgan said.
Given the miner’s strong growth profile and fewer macro risks in 2025, the firm sees Antofagasta as well-positioned for further upside.