JP Morgan cuts Anglo American to 'neutral'
JP Morgan cut its rating on Anglo American to 'neutral' and upgraded Antofagasta to the same status as the bank started moderating its highly bullish view of mining and steel companies.
Euphoria surrounds mining and steel at the start of 2021 because the sector is a default exposure for rebounding global growth and reflation with trading multiples low, JP Morgan said.
Previous economic crises suggest the sector has not peaked yet, the bank said, reiterating its 'overweight' ratings for top picks BHP and Rio Tinto. JP Morgan has started to reduce its 'extreme overweight' sector view with macro catalysts expected to recede during the year. These include fiscal consolidation and slowing credit growth in China and the potential for the dollar to strengthen in the second half if the Federal Reserve tapers its bond-buying programme.
JP Morgan reduced its rating on Anglo American from 'overweight' and upped its price target to £29 from £28.50. Analyst Dominic O'Kane upgraded his rating on Antofagasta to 'neutral' from 'underweight' and set a price target of £11.70, up from 870p.
O'Kane increased his price target for BHP to £24.60 from £23.90 and reduced its Rio Tinto target to £71 from £71.30.