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Anglo's portfolio shake-up progressing well, says Citi

Citi has renewed its coverage of Anglo American with a 'neutral' rating, saying that the mining giant's portfolio restructuring is progressing well but appears priced into the stock.

  • Anglo American
  • 11 March 2025 11:40:13
Anglo American

Source: Sharecast

Nevertheless, the bank sees some upside with a target price of 2,600p, compared with Monday's closing price of 2,257.5p, despite a decent performance over the past year as the company continues to "optimise" its business through demergers and disposals of certain divisions.

"AAL has made decent progress on its portfolio optimization with coal and nickel business disposals already sealed, while PGM demerger is on track. Diamond remains the last piece in the pack of non-core assets," Citi said in a research note.

"This marked shift in the investment case has led to a c30% share price outperformance since the announcement in May’24, implying a sharp re-rating of the remainco business."

The stock's current valuation puts it trading at 6.1 times 2025 estimated EBITDA, which is a premium to others in the diversified mining sector.

However, further upside could be seen in a potential rally in commodity prices or renewed M&A interest from global peers, Citi said.

Shares were up 1.3% at 2,285.5p by 1136 GMT.

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