- Anglo American
- 03 May 2024 17:20:08
Source: Sharecast
Berenberg updated its model on Anglo American following its 2023 investor update, which it released on 8 December, with the stock closing down roughly 20%, as it "materially" underperformed peers due to the magnitude of volume cuts.
The German bank noted that while it has seen an improvement in sentiment regarding Anglo American in recent weeks and months, it still does not think that the time was right to step into the equity story.
Berenberg said this was mainly due to the severity of the cuts to estimates, alongside its expectation that lower volumes and still sticky costs will impact free cash flow generation and fail to support a deleveraging story.
"While some may argue that the stock is cheap after a 20% sell-off, our revised estimates bring our net asset value down materially and our price target to 1,500.0p per share. We remain 'hold'-rated. We also flag potential impairment risk with the 2023 results given the guidance cuts. Anglo is trading on 1.67x NAV and 5.2x 2024E EBITDA," said Berenberg.
Reporting by Iain Gilbert at Sharecast.com