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Bargain Blue Chips – P3 – Charts
Antofagasta (ANTO)
Source: CMC Markets, 30 August 2018
Will Antofagasta go to July highs of 1012p (+23%) or fall to June 2017 lows of 747p (-9%)?
- Sharp sell-off from June 2018 highs, with shares down ~29% from 2018 highs.
- Downtrend on the back of global trade tensions, strengthening USD and falling copper prices.
- Bounced from falling lows support level dating back to August 2017, reversing ~5% of losses.
- RSI and Stochastics are turning higher, indicating a bullish signal.
- ADX (trend strength) is increasing, supporting the uptrend.
- Brokers are split, but with a bias toward positive, with 40% saying “Buy”
- 68% of brokers see an upside from current price levels, indicating an average target price of 943p.
- According to analysts at RBC Capital Markets (24 August 2018), Antofagasta’s second-half prospects are better than H1 performance and that the current cheap valuation is a “compelling entry point following the recent sell-off”.
Broker Consensus: 40% Buy, 28% Hold, 32% Sell
Bullish: Jefferies, Buy, Target 1300p, +53% (27 August 2018)
Average Target: 943.71p, +11% (28 August 2018)
Bearish: Liberum, Sell, Target 535p, -37% (1 July 2018)
Pricing data sourced from Bloomberg on 30 August 2018. Please contact us for a full, up to date rundown.
British American Tobacco (BATS)
Source: CMC Markets, 30 August 2018
Will BAT return to February level of 4512p (+19%) or fall to June lows of 3594p (-5%)?
- British American Tobacco (BAT) shares have been in a downtrend through first quarter of 2018.
- Downtrend stabilized in April-May, with shares in a sideways trend since then.
- Shares are down ~25% since the beginning of the year but have clawed back ~10%.
- Late August sell-off an indication of a potential new range between 3795p and 4239p.
- Brokers are overwhelmingly bullish on BAT shares, with a healthy 95% of brokers expecting share prices to rise in the medium-term to an average target of 4755p (February 2018 highs).
- Analysts at Barclays (10 August 2018) are saying that BAT is well-prepared to handle new tobacco products, pointing to the tobacco-maker’s consistent strategy and good balance in terms of products and geographical coverage. “Shares look cheap versus history”, says the brokerage.
Broker Consensus: 77% Buy, 18% Hold, 5% Sell
Bullish: Investec, Buy, Target 5500p, +42% (26 July 2018)
Average Target: 4755.88p, +22% (28 August 2018)
Bearish: DZ Bank, Sell, Target 3650p, -6% (31 July 2018)
Pricing data sourced from Bloomberg on 30 August 2018. Please contact us for a full, up to date rundown.
Standard Chartered (STAN)
Source: CMC Markets, 30 August 2018
Will Standard Chartered revisit 787p May highs (+24%) or fall to 599p 2016 lows (-5%)?
- Standard Chartered shares trending lower since early 2018, with a falling narrowing channel.
- Shares have lost nearly 19% year-to-date, falling ~26% from 2018 highs reached in February.
- Technical indicators are moving up, supporting the case for a share price bounce from channel floor
- Brokers are neutral, evenly split between those saying “Buy” and “Hold”, with a significant minority saying “Sell”. Broker target prices are bullish, with 73% of brokers seeing a rise back to mid-June levels
- According to analysts at HSBC (1 August 2018), Standard Chartered shares may have already bottomed out, as the stronger USD is providing good news when bank’s earnings are translated back into a sterling-denominated share price.
- US investigation into the bank’s Iran business could provide more bearish pressure on shares.
Broker Consensus: 36% Buy, 36% Hold, 28% Sell
Bullish: Value Investment Principals, Buy, Target 1050p, +60.3% (1 August 2018)
Average Target: 739.13p, +12% (28 August 2018)
Bearish: Jefferies, Underperform, Target 348p, -47% (14 August 2018)
Pricing data sourced from Bloomberg on 30 August 2018. Please contact us for a full, up to date rundown.
Standard Life Aberdeen (SLA)
Source: CMC Markets, 30 August 2018
Will Standard Life return to 445p highs (+40%) or break down to 2018 low of 301p (-6%)?
- Shares in a 2018 downtrend, having lost nearly 27% since the beginning of 2018.
- Bullish bounce in August away from long-term 9-year rising support.
- Shares recently attempting a test of the ceiling of a 10-month falling channel.
- MACD has broken above the centreline, supporting the case for a potential breakout.
- Analysts at UBS are saying that the acceleration of the share buyback programme is positive for shares despite tough six months (7 August 2018).
- Brokers are bullish, with only 3 analysts out of 18 recommending “Sell”.
- Most brokers are seeing an upside for the shares, with only 1 broker’s target below current levels.
- The rest are forecasting a return to February highs around 418p.
Broker Consensus: 67% Buy, 17% Hold, 17% Sell
Bullish: Jefferies, Buy, Target 488p, +47% (28 August 2018)
Average Target: 418.82p, +26% (28 August 2018)
Bearish: Day by Day, Sell, Target 222.5p, -33% (27 August 2018)
Pricing data sourced from Bloomberg on 28 August 2018. Please contact us for a full, up to date rundown.
Vodafone (VOD)
Source: CMC Markets, 30 August 2018
Will Vodafone bounce back to 214p April highs (+27%) or fall back to 2012’s 154p bottom (-9%)?
- Vodafone shares have fallen over 26% year-to-date, breaking below June 2013 lows.
- Any potential rebound is still in the future, with shares less than 1% away from 2018 lows.
- In its latest trading update (25 July 2018), Vodafone has reiterated FY guidance, pointing to strong trading in Germany and a recovery in the UK market.
- Bundling of TV, phone and broadband services is helping Vodafone retain customers.
- Majority of brokers are holding a bullish outlook on Vodafone, with 64% saying “Buy” and an overwhelming 79% projecting a medium-term bounce back to the share price level around 221p last seen in January 2018.
Broker Consensus: 64% Buy, 18% Hold, 18% Sell
Bullish: ROE Equity Research, Buy, Target 300p, +71% (14 November 2017)
Average Target: 221.76p, +26% (28 August 2018)
Bearish: Macquarie, Underperform, Target 135p, -23% (7 August 2018)
Pricing data sourced from Bloomberg on 30 August 2018. Please contact us for a full, up to date rundown.
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Prepared by Michael van Dulken, Head of Research
