How to play Antofagasta stock after Q1 copper production decline?


Antofagasta plc (LON: ANTO), on Wednesday, reported a big sequential decline in copper production for the first quarter. Its shares ended slightly down today.

Antofagasta had expected a Q1 decline

The mining company produced a total of 145,900 metric tons of copper in Q1 at $1.54 a pound of net cash cost. In the prior quarter, production and cost were at 195,700 tons and $1.27 a pound, respectively.

The quarterly decline was not unexpected, though. Antofagasta had foreseen that scheduled maintenance at Centinela and lower water availability will temporarily weigh on throughput at Los Pelambres.

Chilean multinational is also convinced that production will recover through the rest of the 2023. Therefore, it continues to expect copper production to be in the range of 670,000 to 710,000 metric tons this year at a net cash cost of $1.65 a pound, as per the press release.

Versus its year-to-date high, Antofagasta stock is down more than 10% at writing.

UBS recently upgraded Antofagasta stock

Those interested in capitalising on the recent weakness in this stock should know that analysts at UBS upgraded the London-listed firm to “neutral” this week.

We do not see an obvious catalyst for a de-rating and believe improving political backdrop in Chile combined with low-risk organic growth could drive a re-rating medium-term.

The Swiss bank agrees that Antofagasta stock is trading at a premium versus its U.K. peers. Its EV/EBITDA, however, is comparable to notable global copper players.

The dividend stock currently pays a yield of 3.08% that may be exciting for the potential buyers as well.

The post How to play Antofagasta stock after Q1 copper production decline? appeared first on Invezz.

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