RBC cuts forecasts for Anglo American on weaker copper outlook

(Sharecast News) - RBC Capital Markets has cut its target price for Anglo American from 2,200p to 2,130p and kept an 'underperform' stance on the stock after downgrading its profit forecasts for the next three years. The move follows Anglo's fourth-quarter production update on Thursday. While the company met guidance across all commodities, 2025-2027 guidance was disappointing, according to RBC.

For copper operations in particular, solid output in the fourth quarter was offset by weaker-than-expected pricing, while the volume outlook for 2027 was underwhelming, the broker said.

"We see downgrades to our 2024-2026 EBITDA of 2%-4%. 2027 EBITDA is down 14%, as our copper assumptions were too optimistic on recovery in volumes at Los Bronces and throughput increase at Quellaveco. We have cut 2027E copper production to 797kt from 964kt to bring it inline with guidance of 760-820kt (Visible Alpha consensus at 835kt)," RBC said.

Anglo shares are now trading at 1.19 times net asset value, a premium to diversified mining peers which have an average price-to-NAV ratio of 1.04, the broker said.

At current prices, RBC added that Anglo is likely not currently a bid target for BHP - following a rejected takeover from the latter last May - trading at just a 2.5% discount to the final offer BHP made in May 2024.

Anglo's stock was up 0.7% at 2,467.5p by 1017 GMT.