On Friday, RBC Capital Markets adjusted its outlook on Anglo American (JO:AGLJ) PLC (AAL:LN) (OTC: NGLOY), reducing the mining giant’s price target from GBP 22.00 to GBP 21.30, while maintaining an Underperform rating on the stock. The revision comes after the firm incorporated Anglo American’s most recent fourth-quarter fiscal year 2024 production results and its guidance for the years 2025 to 2027 into their financial model.
According to RBC Capital Markets, the updated guidance has led to a decrease in their EBITDA forecasts for the years 2024 to 2026 by 2% to 4%. The impact is more pronounced for the year 2027, where the estimated EBITDA has been lowered by 14%. The revision reflects a more conservative outlook on copper production, particularly at the Los Bronces and Quellaveco mines.
The firm’s analysts noted that their previous copper production estimates were overly optimistic. They have now reduced their 2027 copper production forecast to 797 kilotonnes from an earlier estimate of 964 kilotonnes. This aligns better with Anglo American’s provided guidance of 760-820 kilotonnes and is below the Visible Alpha consensus of 835 kilotonnes.
The recalibration of these projections has also led to a 3.4% decrease in the operational Net Asset Value (NAV) estimations for Anglo American. This adjustment has been cited as the primary reason for the lowered price target to 2130 pence (GBP 21.30), down from the previous target of 2200 pence (GBP 22.00).
The update from RBC Capital Markets reflects the latest available data from Anglo American, ensuring that investors have the most current analysis of the company’s financial outlook based on its operational performance and market conditions.
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