Antofagasta (LON:ANTO) - Rebasing expectations

Thursday, Jul 18 2013 by

Jul 18th 2013 - Edison Investment Research today published a report on Antofagasta (ANTO.L, LSE:ANTO, LON:ANTO) entitled "Rebasing Expectations". In summary, the report says:

After three years of strong production growth, we anticipate three years of stable copper output before Antofagasta’s next major growth phase. A lower copper price, rising costs and falling by-product credits adversely affect FY13 EPS, which we forecast to fall 46% y-o-y to US$0.75. The return to a 35% payout ratio results in a 72% y-o-y fall in our forecast FY13 total dividend. Highly cash generative current operations underpin our standard NPV10 valuation of 742p per share and arguably a 9% discount rate would be justified, which would raise it to 828p. Although growth projects could double copper output, value generation is limited by their capital intensity.




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Edison Investment Research is a leading international investment research company. It has won industry recognition, with awards both in the UK and internationally. The team of 95 includes over 60 analysts supported by a department of supervisory analysts, editors and assistants. Edison writes on more than 400 companies across every sector and works directly with corporates, fund managers, investment banks, brokers and other advisers. Edison’s research is read by institutional investors, alternative funds and wealth managers in more than 100 countries. Edison, founded in 2003, has offices in London, New York and Sydney and is authorised and regulated by the Financial Services Authority (www.fsa.gov.uk/register/firmBasicDetails.do?sid=181584). more »


 
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