Source: Sharecast
Berenberg acknowledged that global equity markets were "in a challenging place", with "significant volatility" being brought on by ongoing Middle East tensions and market worries about rising inflation as oil prices continue to trend higher. It said the knock-on worries on the impact of inflation and heightened geopolitical tensions on global growth has "undoubtedly knocked copper sentiment", with copper prices linked to expectations of global growth.
Over the past month, copper has fallen by 5% and while Berenberg still remains constructive on the copper price and the outlook for it as a metal from a supply and demand basis, negative sentiment has sent the price lower - dragging equities, such as Atalaya, lower with it.
"In our view, the shares sold off for three main reasons: first, the copper price was lower, so it had macro headwinds against it; second, it flagged a soft Q1 2026 due to rain in Spain, which has created some market worries around guidance (even though it was maintained); and third, and probably most importantly, there was no new news on Proyecto Touro, which is Atalaya's key growth project in Spain," said Berenberg.
The German bank, which has a 'buy' rating on the stock, reiterated that Atalaya's Proyecto Touro remaned "key" and update its model for the firm's recent Q4 results and new cost and capital expenditure guidance.
"We have also made some adjustments to our strip ratios, which moves EPS estimates and lifts our medium-term capex. This results in a price target of 1,210p per share. We see clear catalysts to drive a re-rating; the shares are trading on 1x NAV and 3.1x 2026E EBITDA," added Berenberg.
Reporting by Iain Gilbert at Sharecast.com
