JPMorgan has placed Anglo American PLC (LSE:AAL) on "Negative Catalyst Watch" ahead of its scheduled 23 July update, warning cost inflation could dent earnings across European diversified miners despite improved valuation support.
The broker said the sector has underperformed MSCI Europe by 7% since 9 March and by 20% since June, leaving stocks closer to its price targets. But analyst Dominic O’Kane retained a cautious stance into Q2 reporting, citing “cost-inflation driven earnings disappointments” and volatile geopolitical and commodity risks.
Anglo, rated Underweight, is seen as most exposed, with JPMorgan 6% below Bloomberg consensus for first-half 2026 EBITDA due to high Brazil and South Africa iron ore freight costs.
Glencore PLC (LSE:GLEN), rated Neutral, also faces pressure from African copper, where sulphuric acid costs are more than three times higher. JPMorgan added that any prolonged suspension of the Collahuasi desalination plant could hit copper recoveries for both Anglo and Glencore.
Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) was described as “emerging as a value candidate”, trading around 25% below JPMorgan’s £82.50 price target, though the broker remains wary of Q2 cost impacts.
Kumba Iron Ore was upgraded to Neutral after a roughly 25% fall since February left the shares around 15% below JPMorgan’s ZAR314 target.
