RBC is expecting the upcoming third-quarter results season will be a key test for major European miners as companies seek to deliver on full-year guidance.
The broker pointed to Glencore PLC (LSE:GLEN), Norsk Hydro and Valterra as its preferred names in the diversified space, with Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) and Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF) standing out among precious metals producers.
Analysts said Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF), Glencore and Antofagasta PLC (LSE:ANTO) face pressure to stretch output to meet the lower end of guidance ranges in iron ore and copper. “This quarter will be particularly important … given the limited ability to catch up,” RBC commented.
For Glencore, RBC expects production guidance to be maintained, with copper volumes set to rise sharply in the second half. Norsk Hydro’s focus is likely to be on fourth-quarter guidance, where RBC is 6% ahead of consensus driven by extrusions and aluminium metal. Valterra is expected to benefit from recovering operations after earlier flooding.
The broker also highlighted upside at Ecora Resources PLC (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF) from contributions at key assets, while Sibanye Stillwater could post a positive quarter on inventory releases in South Africa. Antofagasta and Boliden were flagged as facing potential estimate downgrades on weaker volumes.