On Friday, Citi reaffirmed its Neutral rating and ZAR800.00 price target on Anglo American (JO:AGLJ) Platinum Limited (AMS:SJ) (OTC: ANGPY). The firm's forecast for the company's full-year 2023 earnings is approximately 15% below the consensus estimate. Analysts at Citi project headline earnings per share (HEPS) of 50.3 ZAR for the fiscal year, compared to the average analyst estimate of 58.4 ZAR per share.
The financial institution anticipates a lower final dividend of 8 ZAR per share for Anglo American Platinum, diverging from the Visible Alpha consensus of 13.1 ZAR per share. This expectation is set against a backdrop of challenging market conditions, particularly the low platinum group metals (PGM) prices and cash flow environment in the second half of 2023, which Citi estimates to be nearly break-even.
Anglo American Platinum experienced a significant event on February 8, when the company announced a write-down of concentrate inventory alongside its production results. This news led to a 7% decline in the stock price on that day. Citi closed its catalyst watch (CW) on February 12 after the event had unfolded, yet they noted that consensus estimates had not significantly adjusted since the write-down announcement.
Citi also highlighted the importance of dividends for Anglo American Platinum's investors, pointing out that the stock has averaged a 9% yield over the past four years. They suggest that any reduction in dividend payouts could be unfavorably received by the market, especially given the company's status as a dividend stock. The final dividend and full-year results are to be announced on February 19.
InvestingPro Insights
As we approach the announcement of Anglo American Platinum's full-year results, a glimpse into the real-time data provided by InvestingPro offers further context to Citi's projections. The company, with a market capitalization of $10.25B, is trading at an earnings multiple of 6.51, as of the last twelve months up to Q2 2023. This positions ANGPY as a company with a low P/E ratio, which could indicate that the stock is undervalued relative to its earnings.
InvestingPro Tips highlight that Anglo American Platinum holds more cash than debt on its balance sheet, providing a robust financial cushion that can be reassuring for investors. Moreover, the stock's RSI suggests it is currently in oversold territory, potentially signaling a buying opportunity for contrarian investors or those looking for value stocks.
The dividend yield, as of the most recent data, stands at 4.76%, which, despite being lower than previous years, still represents a significant return to shareholders. This aligns with Citi's emphasis on the importance of dividends for the company's investors. It's worth noting that according to InvestingPro, Anglo American Platinum has maintained dividend payments for 6 consecutive years, underlining its commitment to shareholder returns.
For those interested in a deeper dive into Anglo American Platinum's financials and future prospects, InvestingPro offers additional insights. There are 11 more InvestingPro Tips available, which can be accessed through the dedicated company page at https://www.investing.com/pro/ANGPY. Readers looking to subscribe for a comprehensive analysis can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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