Citigroup reiterated its 'buy' recommendation on Antofagasta PLC (LSE:ANTO) and left its £40 price target unchanged following the group’s 2025 results analyst call.
Citi stated that the key highlight from the call was management’s reaffirmation of its copper volume growth outlook, which pointed to roughly 30% higher production by 2029.
The bank argued that this production uplift remained the principal source of upside in its investment case.
Management confirmed that the ramp-up of the Los Pelambres processing capacity expansion would be the main growth driver in 2026 and 2027.
Citi noted that this expansion would offset lower ore grades at Centinela, which would otherwise weigh on output over that period.
The commissioning of the second concentrator at Centinela was expected to add incremental volumes in 2027 and 2028.
Citi stated that 2029 would be the first year to reflect the full benefit of both growth projects in reported production.
Unit costs continued to provide a tailwind, according to management commentary highlighted by the bank.
Citi maintained that supportive unit costs combined with higher volumes underpinned its medium-term earnings outlook.
Following its model update, Citi trimmed its earnings before interest, tax, depreciation and amortisation forecasts by 1% to 5%.
Earnings before interest, tax, depreciation and amortisation, or EBITDA, measures operating profit before non-cash charges and financing costs.
The downgrade was driven primarily by foreign exchange mark-to-market effects rather than operational changes.
The £40 price target was unchanged, indicating limited impact on Citi’s valuation framework.
Citi forecast that Antofagasta would generate positive free cash flow in 2026.
Free cash flow represents cash generated after capital expenditure and is a key indicator of balance sheet strength.
This was expected despite cumulative capital expenditure guidance of $3.4 billion over the investment phase.
As a result, Citi anticipated that net debt would remain broadly stable through the peak spending period.
In afternoon trading, Antofagasta shares were off 4% at 3,844p after being caught in a broad-based sector sell-off.