Editor’s note: This story has been updated to correct the spelling of the investment banking firm Jefferies.
An Undervalued Opportunity
Diversified miner Anglo American could be a promising buy as copper prices continue to rise, according to a recent report by financial magazine Barron’s. The company, which has been underperforming compared to rivals like BHP Group Ltd, Rio Tinto, and Glencore ADR, is now seen as a potential bargain.
Strategic Transformations
Anglo American is currently in the process of reviewing its assets, with CEO Duncan Wanblad indicating that no option is off the table. The company’s exposure to South Africa has been a drag on its stock price due to various economic and operational challenges. Additionally, analysts have raised concerns about the costly fertilizer project in England.
Potential Growth Avenues
Amidst its challenges, there are speculations that Anglo American might spin off its platinum and iron ore stakes and potentially attract a partner for its fertilizer project. There are even suggestions that the entire company could be up for sale to a competitor.
Analyst Perspectives
Analysts from Jefferies and Morgan Stanley see potential upsides for Anglo American, especially in its copper business. While the company’s performance in this sector has been strong, it has not received due credit due to other operational issues.
Market Trends
Investor sentiment towards copper remains positive, with recent reports indicating supportive fundamentals. Declining inventories in Shanghai and potential production cuts by Chinese smelters hint at a tightening supply situation.
Global Outlook
Experts anticipate increased demand for copper from China, driven by potential stimulus measures and the country’s transition towards green energy. The ING commodities strategist highlighted the role of copper in various sectors, from electric vehicles to renewable energy infrastructure.
