This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Observations – For
Observations – Against
Shares bounced off 2018 intersecting support; potential for rally to June highs. Thanks to USD off its highs, metals prices are off their lows. Copper price bounced off 2018 lows. Attractive 5% forward dividend yield. Big market China opening up to more foreign investment, cutting bank capital requirements to stimulate economic growth. Risk assets tend to benefit from positive market sentiment. End-July updates could help shares.
Risks include fears of a global trade war or slower China growth. Persistent USD strength hurts metals prices although a weaker GBP flatters the value of dividends . Higher interest rates makes mining projects more expensive. Lower oil prices can weigh on Miners by hurting commodity sector sentiment. Results that miss consensus at end-July could hurt the shares.
The consensus target of 1848p is below our short term objective, but the share price bounce could encourage some of the 39% of Neutral brokers to upgrade their ratings, giving momentum to the shares, especially as 73% of broker targets suggest upside form current levels.
Next Event: Q2 Production 19 July; Q2/H1 results, 26 Jul; Ex-div, early Aug
Latest Broker 12-Month Consensus: 42% Buy, 39% Hold, 19% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 2.0 | -5.3 | 4.2 | 9.6 | 66.5 | 161.3 | 75.6 | 17.8 | 33.1 |
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Prepared by Michael van Dulken, Head of Research