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Anglo American, Antofagasta and BHP targets hiked as Deutsche Bank turns positive on mining sector

The bank said commodities had managed to avoid “the levels of extreme margin compression" seen in the 2008 and 2015 downturns and they expected domestic demand in China to “continue to surprise to the upside”

Anglo American PLC - Anglo American, Antofagasta and BHP targets hiked as Deutsche Bank turns positive on mining sector

Mining firms including Anglo American PLC (LON:AAL), Antofagasta PLC (LON:ANTO) and BHP Group PLC (LON:BHP) have had their target prices hiked by analysts at Deutsche Bank as it said major commodities had “rebounded strongly over the past three months”.

In a note on Thursday, the bank said commodities had managed to avoid “the levels of extreme margin compression seen in the [2008 and 2015] downturns” and they expected domestic demand in China to “continue to surprise to the upside”, although Latin American remained “an ongoing source of supply risk”.

“Iron ore will stay stronger for longer and the copper market is moving from surplus to balance heading into 2021”, Deutsche Bank said.

Analysts also said that despite risks and uncertainties relating to the coronavirus and the global demand outlook, they expected that China would use “tried and tested methods of stimulating the economy, credit easing combined with positive construction trends (infrastructure, property) are likely to be positive demand drivers in [the second half]”.

Anglo American was raised to 2,300p from 2,150p and had its ‘buy’ rating maintained, while Antofagasta, rated ay hold, was increased to 860p from 760p and BHP was upped to 1,750p from 1,450p and retained at buy.

Other mining firms to receive target price upgrades were Glencore PLC (LON:GLEN), which was rated at buy and upped to 240p from 220p, KAZ Minerals PLC (LON:KAZ), rated at hold and hiked to 530p from 410p, and Rio Tinto plc (LON:RIO) which was raised to 4,600p from 4,100p and retained at hold.

Quick facts: Anglo American PLC

Price: 1879.8 GBX

LSE:AAL
Market: LSE
Market Cap: £256.08 m
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