Anglo American share price leaps on broker upgrade

on Oct 13, 2014
Updated: Oct 21, 2019
Listen, Monday, October 13: Shares in Anglo American (LON:AAL) have been in demand today following a broker upgrade, positive Chinese trade data and fresh reports of potential asset sales in Chile.

The FTSE 100-listed mining company rose almost five percent intraday, making its way to the top of the leaderboard. As of 14:23 BST, the stock was changing hands at 1,384.50p — 4.45 percent up on the day.
Investor sentiment improved after Credit Suisse upgraded its recommendation on Anglo American to ‘outperform’ from ‘neutral’, stating that the balance between risk and reward looks attractive again, following a recent selloff. The broker left its price target unchanged at 1,800.00p a share, implying in excess of 30 percent upside potential.

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Anglo American’s stock has dropped more than 20 percent from its year-to-date peak and “we believe the risk/reward is attractive once again,” analyst Liam Fitzpatrick wrote in a note, as quoted by MarketWatch. “Commodity prices have clearly weakened; however, our confidence in management delivering on targeted cost savings, capex reductions, and divestments has not,” Credit Suisse added.

Separately, analysts at Canaccord Genuity today initiated their coverage of Anglo American’s stock with a ‘buy’ recommendation and 1,720.00p a share target. Despite the anticipated short-term pressure on the group, as markets revise their commodity price forecasts lower, the broker sees more upside potential than downside risks over the longer-term.

Anglo America has been further underpinned today after data showed that exports from China, the world’s top metals consumer, had surged 15.3 percent last month from a year earlier, with the result marking the biggest increase since February 2013.

Fresh reports of potential asset sales also provided a boost. The Sunday Times yesterday reported that Anglo American was close to launching a £1 billion sale of copper mines in Chile as part of the company’s plan to radically reshape its business. The looming disposal process was first revealed by Bloomberg last week ().
According to the FT, as of 10 October 2014 the consensus forecast amongst 53 polled investment analysts covering Anglo American has it that investors should hold their position in the company.
**As of 14:21 BST, buy Anglo American shares at 1,385.50p.**
**As of 14:21 BST, sell Anglo American shares at 1,384.50p.**


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