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Antofagasta slips as HSBC downgrades its rating to ‘reduce’ from ‘hold’ following miner’s 2018 full-year results

HSBC's analysts concluded that although Antofagasta’s operational outlook is encouraging, they believe most of the upside is already priced into the stock

Mining truck
The global bank raised its price target for the FTSE 100-listed firm to 790p from 720p, with the stock currently trading at 960.40p

HSBC trimmed its view on Antofagasta PLC (LON:ANTO) on Wednesday, downgrading its rating to ‘reduce’ from ‘hold’ following the Chilean copper miner’s 2018 full-year results.

The global bank only raised its price target for the FTSE 100-listed firm to 790p from 720p, with the stock currently trading at 960.40p, down 0.5% on Tuesday’s close.

READ: Record production can't hide drop in revenues, earnings and dividends from Antofagasta

In a note to clients, HSBC’s analysts pointed out that Antofagasta posted a higher-than-expected dividend for 2018 but its core earnings dropped, in line with projections

They said they believe the miner has a quality portfolio with a good operational delivery track record, solid balance and stable forward dividend yields.

However, the analysts added, the company’s cost positioning in the second/third quarter has created high levels of gearing to the copper price, resulting in its share price rising by 20% in the year-to-date, while the copper price has only risen 8%.

The analysts concluded that although Antofagasta’s operational outlook is encouraging, they believe most of the upside is already priced into the stock.

Quick facts: Antofagasta PLC

Price: 875.6 GBX

LSE:ANTO
Market: LSE
Market Cap: £8.63 billion
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