Oracle launches unified health data exchange console
Investing.com -- J.P. Morgan in a note dated Thursday said Europe’s metals and mining sector has potential for continued gains but emphasized that stock selection is becoming more nuanced as valuations rise.
The brokerage recommended Rio Tinto as its only “overweight” pick among European diversified miners, while downgrading Glencore to “neutral” and maintaining Anglo American at “neutral.”
Mining has been Europe’s second highest returning sector since Aug. 1, rising 22%. J.P. Morgan noted that mark-to-market earnings per share momentum has accelerated faster than consensus upgrades over the same period, showing more than 15% upside to 2026 EPS expectations.
The brokerage expects third-quarter reporting to act as a trigger for positive earnings revisions, with 2026 EPS forecasts rising 6% for Rio Tinto, 25% for Glencore, 17% for Anglo American, and 12% for BHP.
Rio Tinto is trading at 5.4/4.8x EV/EBITDA for 2025/26 and offers free cash flow yields of 5%/8%.
J.P. Morgan set a Dec. 2026 price target of £61.70 per share, up from £54.50, and placed the stock on positive catalyst watch ahead of its capital markets day on Dec. 4.
Analysts cited potential shareholder value initiatives, including copper volume growth of more than 30% by 2028 to roughly 920,000 tons, a re-evaluation of lithium strategy and capital expenditure, and possible resumption of share buybacks currently restricted by Chinalco’s near-maximum <15% stake.
Glencore was downgraded to “neutral" with a Dec. 2026 price target of £4 per share, up from £3.70, and placed on negative catalyst watch ahead of its third-quarter results on Oct. 29 and capital markets day on Dec. 3.
J.P. Morgan cited elevated event risk due to the need for roughly 50% higher copper output in the second half of 2025 to meet guidance of 850,000-890,000 tons, along with expected higher long-term capital expenditure for greenfield projects in Argentina, which may limit capital distributions.
Anglo American was rated “neutral” on a standalone basis at £27.60 per share. The bank said the proposed merger with Teck Resources would create a $57 billion copper producer, the world’s fourth largest, with an implied 2027/28 EV/EBITDA of 7.5/6.5x and free cash flow yield of 4%/6%.
J.P. Morgan estimated the merger could support valuations of $60-65 billion at 8x EV/EBITDA or $68-70 billion at 10x. Interloper risk is low, and the merger reduces pressure on Anglo to increase its offer following Teck’s production downgrade.
Outside the diversified miners, J.P. Morgan maintained overweight ratings on Antofagasta, citing it as the top European copper pure play, and Fresnillo in gold.
Macro factors support the sector. Copper is forecast to rise above $11,000 per ton in 2026, partly due to a projected 270,000-ton production loss at the Grasberg mine, owned by Freeport.
China’s upcoming economic strategy announcements, including potential fiscal loosening exceeding RMB 500 billion targeting infrastructure and technology, could further support metals demand.
Iron ore enters a seasonally stronger period, historically rising in 10 of the last 15 Nov.-March periods due to supply disruptions in Australia, Brazil, and China.
J.P. Morgan revised its Q3 commodity forecasts, raising 2026 copper by 5% to $10,500 per ton, aluminum by 2% to $2,675 per ton, and leaving iron ore unchanged at $95 per ton.