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Investing.com -- Antofagasta (LON:ANTO) shares rose over 3% on Wednesday as J.P. Morgan offered a positive assessment of the mining company’s outlook, citing peer-leading volume growth and a projected inflection in free cash flow.
The brokerage has added Antofagasta to its Analyst Focus List and placed it on a Positive Catalyst Watch ahead of the second quarter 2025 results.
Since J.P. Morgan double upgraded Antofagasta to "overweight" in late February, the company’s prospects have reportedly improved despite ongoing macroeconomic and trade uncertainties.
Copper prices have rebounded to levels near those seen before Liberation Day, while gold prices, a key byproduct for Antofagasta, have increased by 8%.
Concurrently, cost inputs such as oil and treatment/refining charges (TC/RCs) have weakened over the same period.
J.P. Morgan Commodities forecasts indicate that the copper market is expected to face modest surpluses in 2025 and 2026.
However, the market is projected to shift into a deficit starting in 2027, expanding to a deficit exceeding 3 million metric tons by 2030.
The brokerage also noted that potential supply disruptions could contribute to a near-term tightening of the market.
With projections of copper growth by 2027 and 2028, Antofagasta is poised for major growth.
This growth rate is noted as higher than that of its global copper peers. This anticipated volume expansion is expected to drive a de-rating in Antofagasta’s EV/EBITDA from about 9x in 2025 to about 5x in 2028.
Additionally, the company’s free cash flow yield is projected to inflect from negative 3% in 2025 to positive 7% in 2028, compared to peers at about 6%.