Barclays sees decent Q4 with seasonality tailwinds for European miners
** Barclays says European miners could have a decent Q4 with seasonality tailwinds, near-term support for base metals from potential China stimulus and global rate cuts
** Any benefits from Chinese stimulus are likely to be felt in a (modest) acceleration in base metals demand from accelerating the equipment/appliance upgrading program, with steel & iron ore demand largely unchanged, it says
** Global central banks moving to an easing cycle should benefit the mining sector via restocking, recovering construction activity and a weaker USD, it adds
** The broker points out that copper, aluminium and metallurgical coal are supported by supply side constraints, while it sees the gold bull market set to continue as real yields decline
** Barclays notes the U.S. election outcome could be a negative catalyst if it results in a step-change in China tariffs, as seen during Donald Trump's presidency in 2018
** It downgrades Boliden BOL.ST to "underweight" from "overweight" on M&A and project delivery risk, headwinds from zinc and copper treatment charge and refining charge contract settlements into 2025, among others
** Its preferred "overweight"-rated names are Glencore GLEN.L, Anglo American AAL.L, and Norsk Hydro NHY.OL
** Among precious metals, it highlights Endeavour Mining EDV.L and Hochschild Mining HOCM.L, citing their spot FCF yields
COMPANY | RATING | OLD RATING | PT | OLD PT |
|---|---|---|---|---|
Anglo American | overweight | n/a | GBP 26.00 | GBP 27.40 |
Antofagasta ANTO.L | underweight | n/a | GBP 15.50 | GBP 16.00 |
BHP BHP.AX | equal-weight | n/a | GBP 24.00 | GBP 25.50 |
Boliden | overweight | underweight | SEK 300.00 | SEK 365.00 |
Endeavour Mining | overweight | n/a | GBP 24.00 | GBP 29.00 |
Ferrexpo FXPO.L | equal-weight | n/a | GBP 100 | GBP 100 |
First Quantum Minerals FM.TO | equal-weight | n/a | CAD 17.00 | CAD 18.00 |
Fresnillo FRES.L | equal-weight | n/a | GBP 800 | GBP 685 |
Glencore | overweight | n/a | GBP 485 | GBP 520 |
Hochschild Mining | overweight | n/a | GBP 240 | GBP 205 |
Norsk Hydro | overweight | n/a | NOK 87.00 | NOK 89.00 |
Petra Diamonds PDL.L | equal-weight | n/a | GBP 0.39 | GBP 0.39 |
Rio Tinto RIO.L | overweight | n/a | GBP 57.00 | GBP 62.50 |
South32 S32.AX | overweight | n/a | GBP 2.05 | GBP 2.00 |
Vale VALE3.SA | overweight | n/a | $16.00 | $17.00 |
Reporting by Marta Frąckowiak
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