Antofagasta’s Balanced Risk-Reward Profile Amid Manageable Production and Capex Risks

Antofagasta (ANTO – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Ioannis Masvoulas from Morgan Stanley upgraded the rating on the stock to a Hold and gave it a p1,760.00 price target.

Ioannis Masvoulas’s rating is based on a combination of production risks, capex expectations, and valuation assessments. Although some production risks have materialized, such as a weaker 2025 volume outlook at Los Pelambres and potential challenges with the Zaldivar mining permit, these risks are seen as manageable due to their limited impact on overall production and net present value. Furthermore, the anticipated capex risks for 2025 are now better understood, with estimates aligning more closely with market expectations.
Despite a recent rally, Antofagasta’s stock has underperformed its peers over the past few months, resulting in a less expensive valuation relative to its historical trends. The current stock price implies a copper price that is only slightly above the long-term incentive price. Consequently, the risk-reward profile appears more balanced, prompting a revision of the price target and a Hold rating as the stock trades in line with the revised target.

In another report released yesterday, Deutsche Bank also maintained a Hold rating on the stock with a £19.50 price target.

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Antofagasta (ANTO) Company Description:

Antofagasta is a Chilean copper mining company. The company operates four copper mines in Chile, two of which produce significant volumes of by-products. The company also has a portfolio of growth opportunities located mainly in Chile. In addition to mining, the company has a transport division providing rail and road cargo services in northern Chile to mining customers. All of the company’s operations are located in the Antofagasta Region of northern Chile except for its flagship operation, Los Pelambres, which is in the Coquimbo Region of central Chile. The operating business segments are Los Pelambres, Centinela, Antucoya, Zaldivar, Exploration and evaluation, Corporate and other items, and Transport division. The Los Pelambres segment drives maximum revenue.