JPMorgan Cazenove has juggled its ratings for FTSE 100-listed miner Randgold Resources PLC (LON:RRS) and mid-cap peer KAZ Minerals PLC (LON:KAZ) in a sector review.
The US bank said it has upgraded its stance on Randgold to ‘overweight’ from ‘neutral’ after a 15% share price fall in the year-to-date.
READ: Randgold Resources slides on lower 1Q earnings due to impact of strikes
However, JPMorgan cut its stance on Kazakhstan-focused group KAZ to ‘neutral’ from ‘overweight’ citing a bleak outlook for platinum.
In mid-morning trading, KAZ shares topped the FTSE 250 fallers list, down 7.6% at 994.8p, while Randgold shares were 0.7% lower at 5,892p reflecting a weaker trend for the FTSE 100 index
In the sector review, the US bank’s analysts said the changes came after they updated estimates and target prices for their mining universe to reflect their latest commodity prices forecasts.
They added: “Our 2018 sector thesis predicted outperformance of miners in 2018 due to; synchronised global growth, robust economic growth and FAI (fixed asset investment) in China and attractive valuations.
“Macro fundamentals and cash returns potential remain supportive and we reiterate our preference for high Beta positioning.”
The JP Morgan analysts raised their long-term estimate for the iron ore price to US$60 per tonne and for thermal coal to US$77/ per tonne, benefiting all UK diversified miners.
They also expect a resumption of a medium term lower trend for the US dollar and around a 10% higher gold price.
Among other |London-listed miners, JPMorgan reiterated ‘overweight’ ratings on both Anglo American PLC (LON:AAL) and Glencore PLC (LON:GLEN) with both stocks trading at over 20% discounts to their peers.
They remain ‘neutral’ on both Rio Tinto PLC (LON:RIO) and BHP Billiton plc (LON:BHP).