Will Antofagasta meet production targets?

Antofagasta is due to report its first-half figures for 2014 on Tuesday. The consensus is for revenue of $2.7 billion and an operating profit of $908 million.

A mining truck
Source: Bloomberg

Antofagasta is trading at £8.05; the stock is down 5.5% since it announced its full-year figures for 2013 in March. The profits missed estimates but the dividend exceeded analysts’ forecasts.

Last financial year, the miner posted record productions levels but the slump in the price of copper affected its bottom line. It has been difficult for the mining sector as metal prices are not what they once were and costs continue to climb; last year the cost of extracting copper rose by 10%.

In March, the company outlined its full-year copper production target for 2014 of 700,000 tonnes. With the hopes of ramping it up to 900,000 tonnes by 2018, dealers will be wondering if this guidance is maintained.

Analysts are a touch on the bearish side when it comes to Antofagasta’s outlook. Out of the 31 recommendations, six are buys, 15 are holds and 10 are sells.

If the share price drops below £8 the next level to watch for is £7.60. However, if the full-year guidance is upped the stock could target £8.40.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by analysts