Source: Sharecast
The bank, which trimmed its price target on the stock to 950p from 980p, said the shares have de-rated significantly, which is a rarity for ANTO and provides a "compelling" entry point.
RBC said the company's first half was one to forget but the second half suggests better prospects. It expects the stock to regain a premium valuation over the coming months, possibly enhanced by its copper exposure, which has significantly underperformed iron ore by 10% year-to-date. It said the recent weakness in the shares is partly down to the weakness in copper price.
"We expect solid long-term fundamentals should limit the downside and a rebound could provide some recovery for the shares. On a relative basis, weakness in other commodities, should they develop is likely to allow Antofagasta to outperform."
RBC said Antofagasta ticks nearly all of the boxes that its look for in a mining company for long-term investment. It pointed to large, long-life and expandable assets in a mining-friendly jurisdiction producing a commodity into a structurally compelling market, at a reasonable margin, with little to no debt.
RBC attributed the target price downgrade to the first-half results and its inclusion of $300m of new value from the likely monetisation of water infrastructure.
On The Beach got a boost on Friday as Berenberg upped its price target on the stock to 630p from 600p and reiterated its 'buy' rating following the company's in-line trading statement and the announcement of its acquisition of Classic Collection Holidays.
It said the update wa as testament to both OTB’s differentiated model, which has seen it deliver strong earnings growth even against poor market backdrops and the company’s highly cash generative nature, which should allow it to continue making value-creative acquisitions over time.
It also noted that unlike other travel businesses, OTB does not take any inventory risk in that it never speculatively pre-buys hotel beds or flight seats. In addition, it has very low fixed costs, with a technology-led model and zero stores.
"As a result, in a weaker demand environment OTB: 1) is not burdened with distressed inventory being sold at a loss; 2) has low fixed overheads; and 3) sees its main cost, online marketing, automatically fall (as fewer consumer searches equals fewer paid clicks with Google).
"Backed by those advantages, OTB has consistently delivered strong earnings growth, even where revenue trends have been weaker."
Berenberg also argued that the market is currently ascribing virtually no value to the company’s international rollout. As a result, any positive updates on progress in Sweden could be a further catalyst for the stock.
Elsewhere, analysts at Berenberg sounded a positive note on several of the UK's main housebuilders, arguing that investors' concerns were overdone in several respects, including the sustainability of the dividend payouts from the sector, the impact declines in "average" house prices might have and buyer affordability.
Nevertheless, stock selection in the space "matters" they stressed, pointing out how picking shares of the top-performer each year would transform £100.0 into £63,000.0 over the course of 17 years, while doing the opposite would see the value of the initial investment dwindle to just £2.0.
"In our view, share price performance continues to diverge from fundamentals, with investors’ memories of past performance shaping their future expectations," analysts Sam Cullen, Lushanthan Mahendrarajah, Anthony Plom and Omar Ismail said in a research note sent to clients.
Regarding companies' dividends, they said that at current levels, payouts could be maintained even should volumes fall 20% and house prices fall 10%.
As for the "average house price", it tended to be very influenced by movements in London prices, which acounted for 21% of the national price index, they said.
"Mortgage repayments are at near record lows when compared to incomes, deposits (available through Help to Buy) are the barrier to home ownership. Mortgage rates can almost double before long run levels of affordability are breached," they explained.
Taking all of the above into account, they retained buy-rated Barratt Developments (target price: 670.0p), Taylor Wimpey (target price: 210.0p), Countryside (target price: 430.0p) and Bellway (target price: 3,760.0p) as their 'top picks'.