| Date | Subject |
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20/5/2020
14:26 | diku: Hold at 760p when share price is at 850p...
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08/9/2019
07:20 | sarkasm: the motely fool
Risky investment
Analysts at Deutsche Bank also downgraded their outlook for mining group Antofagasta (LSE: ANTO) last week. After awarding the company a ‘hold’ rating and 930p and price target back in April, analysts have now downgraded Antofagasta to ‘sell’.
This appears to be another valuation call. Over the past 12 months, the outlook for the mining group has steadily deteriorated and analysts across the City have downgraded their prospects for the business. This time last year, analysts were expecting Antofagasta to earn $0.91 per share for full-year 2019. Now they’re forecasting just $0.62, a 29% year-on-year decline.
As analyst as expectations have deteriorated, the share price has remained constant. As a result, its shares are now dealing at a forward P/E of 16, making the company by far the most expensive in the mining sector. The rest of the industry is dealing as a forward P/E of just 8.
Looking at this evaluation, it’s clear to me why analysts think now could be an excellent time to move away from the stock.
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08/9/2019
07:16 | sarkasm: the motely fool
Risky investment
Analysts at Deutsche Bank also downgraded their outlook for mining group Antofagasta (LSE: ANTO) last week. After awarding the company a ‘hold’ rating and 930p and price target back in April, analysts have now downgraded Antofagasta to ‘sell’.
This appears to be another valuation call. Over the past 12 months, the outlook for the mining group has steadily deteriorated and analysts across the City have downgraded their prospects for the business. This time last year, analysts were expecting Antofagasta to earn $0.91 per share for full-year 2019. Now they’re forecasting just $0.62, a 29% year-on-year decline.
As analyst as expectations have deteriorated, the share price has remained constant. As a result, its shares are now dealing at a forward P/E of 16, making the company by far the most expensive in the mining sector. The rest of the industry is dealing as a forward P/E of just 8.
Looking at this evaluation, it’s clear to me why analysts think now could be an excellent time to move away from the stock.
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23/3/2016
14:48 | chinese investor: Price Of ANTO <==> Price Of Gold
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04/2/2016
15:36 | vaughanthompson: I am in long after waiting several months for the share price to bottom out. Copper prices seem to be recovering since mid January and are up today which may have triggered the sharp rise in the ANTO share price (10% in the last two hours). Fingers crossed that it is not just a flash in the pan as this company has been very volatile.
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25/1/2016
08:38 | sogoesit: From this w/e's Chronic Investor:
This week’s episode of Bearbull is The Mystery of the Disappearing Share Price. The mystery is not so much that the share price in question is disappearing, but that it’s fading so fast. Naturally enough, there is also the suspicion that an investment opportunity may be lurking here, too – solve the mystery and it might become clear that the price should not have disappeared quite as much as it has.
The share price in question is that of Chilean copper miner Antofagasta (ANTO), to which the intuitive response is: come on, that’s no mystery at all, the price is disappearing because it’s linked to the annual ritual of punters – you can’t really call them ‘investorsR17; – getting in a dither about the slowing pace of China’s growth and, therefore, selling Chinese equities. From that, there is a sort of syllogistic connection with Antofagasta’s share price since slowing growth in China means faltering demand for copper, which hits Antofagasta.
Yet the link between Antofagasta’s share price and China’s stock markets is not as strong as is widely assumed. Based on monthly returns over the past five years, the two move in the same direction less than a third of the time. And that’s probably as it should be, because Antofagasta’s fortunes are not bound that tightly to China’s. At least, exports to China accounted for 24 per cent of its revenues in 2014.
Meanwhile, Japan has consistently been Antofagasta’s biggest market. It absorbed 37 per cent of its output in 2014 and has taken up that sort of proportion for the past five years. The fact that Japan is hardly a growth market did not seem to matter to Antofagasta’s share price when it was riding clear of £12 three years ago, so why should it matter so much now that China’s demand for copper may be faltering?
The plausible response to that question would be because the state of China’s economy must have a big influence on the copper price and, more than anything, Antofagasta’s share price is linked to changes in that commodity’s price – in the past five years almost three-quarters of the time its price and copper’s have moved in the same direction (for the data, click on this link). That’s pretty much the same as the correlation in price movements between Antofagasta and the FTSE Mining sector index and it’s slightly higher than the correlation between Antofagasta and its closest lookalike, Southern Copper Corporation (NYSE:SCCO), which is 75 per cent-owned by Mexican mining conglomerate Grupo Mexico .
The fact that Antofagasta’s shares have performed so much worse than all the comparators implies that something company-specific is happening”
However, in the opening weeks of 2016 Antofagasta’s share price has fallen noticeably further than any of these comparators. As of Monday, it had dropped 25 per cent in 2016 compared with 19 per cent for the FTSE Mining index, 18 per cent for the Shanghai Composite index, 13 per cent for Southern Copper’s shares and just 9 per cent for the price of copper.
True, Antofagasta’s earnings are a geared play on the copper price so its share price should be leveraged, too. But the same applies to Southern Copper and the fact that Antofagasta’s shares have performed so much worse than all the comparators implies that something company-specific is happening.
If so, then it’s not obviously revealed in the volume of shares traded. This year, the numbers have been pretty normal with the exception of 14 January when the trading volume was the highest for a year – although the share price nudged up 4p during that day.
Nor has there been any word from the company. The last that was heard from its bosses was in October when they released a miserable trading update for 2015’s third quarter. They cut their forecast for Antofagasta’s copper production in 2015 to 635,000 tonnes. That was fully 10 per cent less than their expectation at the start of the year – 710,000 tonnes – and was even close to 5 per cent less than they had expected in August (665,000 tonnes). All of which is another way of saying that Antofagasta was making enough trouble for itself without the copper market adding to its problems – protests at its biggest mine, Los Pelambres, meant lost production, as did a sliding pit wall and a delayed ramp-up in production at its Centinela complex of mines. Then – because it never rains but it pours – torrential storms in the Atacama Desert also disrupted production at Centinela.
More will be known at the end of the month when management releases its fourth-quarter update for 2015. That may confirm that some pretty astute selling has been happening, or it may provide the basis for the share price to bounce like a copper spring.
As long as the news isn’t seriously bad, you have to wonder how much lower Antofagasta’s shares can fall. After all, this low-cost producer still makes profits with the copper price at its current $1.94 per pound. That’s almost a 10-year low and the last time the copper price was lower than its current level – late 2008 – proved a great time to buy the shares. It’s probably too much – and too naive – to imagine that history is about to repeat itself so neatly. Even so, I’ll be taking a close look at what Antofagasta’s bosses have to say at the end of the month. After all, we all like a good mystery, but we also demand that a mystery be solved.
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22/1/2016
13:36 | market sniper3: Update On ANTO Antofagasta.
Broker Citigroup
Citi actually go from SELL TO BUY today. 440p share price TARGET.
Time to Buy
We resume coverage on Antofagasta, following a restriction period, and upgrade from Sell to Buy with a £4.40/share price target (having been sellers since 2012). The stock has lost ~75% of its value over the past three years and has relative scarcity within the mining sector given its strong balance sheet, ability to self-fund at spot prices, and pure exposure to a structurally deficit commodity. We see ANTO as a “trough cycle survivor” which should appeal to investors despite the risk of a further copper price decline. Spot 2017F attributable EV/EBITDA at 7.2x, while not cheap, is still significantly below the likes of SCCO and BHP.
Trough Cycle Survivor
We calculate 1.3x 2017F Net Debt/EBITDA at spot copper. The company is FCF neutral at current copper prices in 2017+ (negative 2016 due to Encuentro capex). Volume growth is limited until Los Pelambres expansion or second Centinela concentrator; but we see value at current levels, even ex-growth
Copper Structurally Good, Technically Challenged
Citi’s global commodity team maintains a positive outlook for copper, viewing 2Q16 as the trough in the price (averaging $4,300/t). Structural deficits are expected to emerge in 2020+, exacerbated by the current downturn and lack of investment. Yet, short-term we do acknowledge the downside price risks.
Zaldivar Incorporated and Other Key Changes in Our Model
Earnings uplift from Zaldivar is more than offset by a significantly lower copper price forecast, resulting in greater than 50% EPS downgrades for 2015-17F. NPV has dropped to £5.0/sh from £6.8/sh. Price target based on NPV and multiples based valuation methods is cut to £4.40/sh from £6.0/sh due to lower NPV and earnings.
4Q 2015 Production Report on 27th January and 2016 Roadmap
We expect 731kt copper guidance @$1.48/lb C1 for 2016. Key 2016 events include ramp-up of Antucoya, Encuentro oxides first production, integration and potential revised mine plan at Zaldivar, EIA submission for Los Pelambres (LP) expansion, Centinela Moly plant construction, and progress/resolution of LP lawsuit.
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28/9/2015
22:19 | mj19: Antofagasta had been downgraded from Buy to Hold based on valuation, LaFemina said, while adding that the company still appears "very well positioned for a 2+ year horizon."Jefferies noted, "Antofagasta has limited near-term growth, and capex risk is therefore likely to be to the upside. The company also may acquire additional assets following the recent acquisition of a 50% stake in Zaldivar. While now may be an excellent time for a buyer, the risk of a deal is likely to be an overhang on the Anto share price."The price target for Antofagasta has been reduced from 725p to 640p.
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04/8/2015
09:13 | chinese investor: I'll Only Be Happy When The Share Price Starts With A SIX !
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13/1/2015
16:25 | jeffcranbounre: Antofagasta is featured in today's ADVFN podcast.
To listen click here> http://bit.ly/ADVFN0106
In today's podcast:
- Alan Green CEO of TradersOwn.co.uk will be chatting about Quinell, Tesco and Entertainment One. Alan on Twitter is @TradersOwn
- And the micro and macro news including:
Quindell #QPP
Tesco #TSCO
Entertainment One #ETO
Afren #AFR
Greggs #GRG
ASOS #ASC
Pace #PIC
SIG #SHI
Debenhams #DEB
Meggitt #MGGT
Michael Page #MPI
Spire Healthcare Group
Morrison #MRW
Standard Chartered #STAN
Ashmore Group #ASHM
Big Yellow Group #BYG
UK Mail Group #UKM
Carr's Milling Industries #CRM
Antofagasta #ANTO
Debenhams #DEB
Cineworld Group #CINE
Kazakhmys #KAZ
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PLUS1
