Antofagasta (first-half earnings 14 August)
The rout in copper prices means that Antofagasta’s latest update might not be as cheery as other recent ones have been. The focus will remain on whether demand will recover later into the year, or whether trade wars will act to crimp economic growth in China and other emerging markets. The firm is expected to report a 20% drop in earnings over the year, to 23.7 cents per share, while revenue is forecast to be 7% higher, at $2.192 billion. The average move on results day is 4.2%, but current options pricing suggests a 2.4% move. Having seen a sharp drop in the share price since mid June, the shares now trade at 13.7 times forward earnings, well below the five-year average of 22.1. A 3.9% dividend yield is comfortably above the 1.8% average for its peers, and well in excess of the recent average yield. In addition, the firm trades at a 3% discount to its peers, and while this is not huge, it is better than the 6% premium seen on average over the past two years.
Antofagasta’s rising trend from its January 2016 low remains intact, despite the sharp pullback seen since June. If it can hold the rising trendline then a push back towards £10.40 could be on the cards, the stock having held the support zone around £9.30.