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.
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.