Shares in Antofagasta PLC (LSE:ANTO) rose 3% on Wednesday after JP Morgan added the Chilean copper miner to its 'analyst focus' List and placed it on 'positive catalyst watch', citing strong production growth and an improving free cash flow outlook.
The bank reaffirmed its 'overweight' rating and £24 price target, highlighting Antofagasta’s industry-leading copper volume growth, which is expected to rise by 30% between 2024 and 2028.
Analysts said this outpaces the company’s global peers and positions it for a significant re-rating, as its valuation multiple compresses and free cash flow (FCF) improves.
They forecast a sharp swing in free cash flow from negative 3% in 2025 to positive 7% by 2028, supported by rising copper and gold prices and falling input costs such as oil and treatment and refining charges (TC/RCs).
The recent approval of an environmental permit at the Zaldivar mine also reduces execution risk for 2025 copper output.
While JP Morgan sees short-term copper surpluses in 2025 and 2026, the bank predicts a growing supply deficit from 2027 onwards, potentially exceeding 3 million tonnes by the end of the decade.
Such a backdrop would provide structural support to prices and further bolster Antofagasta’s investment case.
The bank raised its 2025 and 2026 group EBITDA estimates by 5% and 1%, respectively and now sits 6% ahead of consensus forecasts.
With the group’s second-quarter production update due on 16 July, JP Morgan sees potential for management to lower its cost guidance, reflecting favourable trends in gold prices and input costs.
Trading at around nine times estimated earnings for 2025, Antofagasta is expected to de-rate to five times by 2028 as cash generation improves and capital expenditure falls.
That, analysts said, should appeal to long-term investors seeking exposure to copper at a time when the clean energy transition is expected to drive demand.
JP Morgan's latest endorsement adds heavyweight backing to Antofagasta’s growth story, helping to lift the stock and signalling confidence in its strategic positioning within the global copper market.
The shares rose 54p to 1,847.5p.