Shares in Anglo American (LON:AAL) have jumped in London in today’s session, boosted by high metal prices, and upbeat comments by Morgan Stanley which lifted its rating on the stock. The analysts have pointed to the blue-chip miner’s ‘back to basics’ strategy, and argue that the group’s discount to peers has expanded.
As of 14:47 GMT, Anglo American’s share price had added 2.69 percent to 1,746.20p, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally into the red and currently standing 0.01 percent lower at 7,747.54 points. The group’s shares have added more than 35 percent to their value over the past year, as compared with more than a six-percent rise in the Footsie.
Morgan Stanley upbeat on miner
Morgan Stanley lifted its rating on Anglo American from ‘equal weight’ to ‘overweight’ today, hiking its price target on the shares from 1,600p to 1,900p. WebFG News quoted the analysts as explaining that it offered re-rating potential since the blue-chip miner continued to execute a ‘back to basics strategy,’ now enhanced by a return to modest growth and potential for strategic portfolio changes and/or additional cash returns under new governance, as well as a more stable investment backdrop.
The broker further pointed out that while Anglo American’s share price was up more than 50 percent since July last year, the discount to peers had nevertheless expanded.
Morgan Stanley also reckons momentum could pick up under the stewardship of relatively new chairman Stuart Chambers and a potentially stabilising environment in South Africa.
Other analysts on Anglo American
JPMorgan Chase & Co, which also sees the miner as an ‘overweight,’ boosted its valuation on the shares from 1,620p to 1,670p today. According to MarketBeat, the blue-chip miner currently has a consensus ‘hold’ rating and an average price target of 1,493.44p.
Jefferies meanwhile hiked its rating on Anglo American last week, pointing to strong fundamentals for the mining sector, and seeing a share buyback as likely at the FTSE 100 group this year.