Berenberg has kicked off coverage of Antofagasta PLC (LSE:ANTO) with a bullish call, giving the FTSE 100 copper miner a £21.00 price target - about 25% above where shares currently trade.
Antofagasta stands out in the London market as a pure-play copper producer, with all four of its operating mines based in Chile. Most major peers mix copper with less fashionable metals like iron ore or coal.
That purity means Antofagasta can tap into growing investor interest in copper as a long-term winner from the energy transition.
The firm is in growth mode. Copper production is expected to rise from around 680,000 tonnes in 2025 to 900,000 tonnes by 2028, led by expansion at its Centinela mine and improving ore grades at Los Pelambres.
And 80% of production sits in the lowest-cost bracket globally, helped by the fact that by-products like gold and molybdenum offset production costs.
That low-cost advantage drives EBITDA margins over 55% - sector-leading by some distance - and supports high returns on capital. Even as the company ramps up capital spending, Berenberg expects net debt to peak at a manageable 0.9 times EBITDA in 2026.
There’s also a sleeper asset in the portfolio. In 2023, Antofagasta quietly bought a near-19% stake in Peru’s Buenaventura, a local mining group with copper, gold and silver operations.
Berenberg reckons the market is underestimating the value of that investment, which could generate over $12 million in annual dividends and open the door to project partnerships in Peru.
Despite this growth and balance sheet strength, Antofagasta trades on just 6.6 times 2025 EBITDA, well below copper-focused peers, which often fetch 8–10 times. Berenberg sees scope for that valuation gap to close, especially as the firm offers exactly what copper bulls are looking for: scale, low costs, growth, and geographic stability.
Risks? The obvious ones - copper and gold prices, local currency swings, and potential mine disruption. But the analysts argue these are manageable, and see upside beyond the current 900,000-tonne production plan if the company pursues further expansions or acquisitions.
In short: Antofagasta is a high-margin, low-risk way to play the copper story, and Berenberg thinks the market is undervaluing it.
In afternoon trading, the shares were down 5.5% at 1,589p, part of a broader sell-off across the mining sector.