- Anglo American
- 02 May 2024 17:19:46
Source: Sharecast
It noted the shares are down 37% over the past year versus the SXXP down 18%, and said that at 1.0x and 4.4x 2023 EV/EBITDA "are attractive on our relatively conservative price deck".
RBC continued: "Operational momentum is returning and we think Anglo should be a relative beneficiary from improved sector sentiment."
Elsewhere, Shore Capital upgraded Auto Trader to ‘buy’ from ‘hold’ as it pointed to strong results and an undemanding valuation.
The broker said Auto Trader’s FY23 results detailed a strong performance and, notwithstanding macro headwinds, "included an encouraging assessment of the outlook for the current year".
"We have updated our financial model and, despite the drag on profitability being exerted by Autorama, forecast attractive EPS growth, a useful DPS progression and strong cash generation (fuelling further share buy-backs).
"We believe the group’s stock valuation looks undemanding relative to this potential and its fundamental attractions following a period of muted share price performance (our fair value estimate of 714p suggests 17% upside potential) so are upgrading our recommendation from hold to buy."
Finally, Citi cut its price target for drinks giant Diageo on weaker US trading.
The bank said Diageo’s "more downbeat outlook" for its US spirits business had prompted it to trim its forecasts for American organic sales growth for both the second half and the 2024 full-year.
It continued: "Citi’s full-year 2024 earnings per share [forecast] is now 3% below consensus.
"Although we expect weaker US trading trends to also impact others, the quantum will be less. Post these changes, Diageo is trading on a discount to Pernod Ricard. Although this is below long-term averages, it is tough to see catalysts for a re-rating ahead of the August 2023 full-year results."
It has therefore cut its target price for the blue chip to 3,600p, from 3,800p, and reiterated its preference for European rivals Campari Group and Remy Cointreau.
