Shares of the FTSE 100-listed Anglo American PLC (GB:AAL) gained momentum today after Jefferies analyst Chris LaFemina upgraded its rating from Hold to Buy. Meanwhile, LaFemina also raised his price target on the stock from 2,500p to 2,850p, implying an upside of 15.7%. The analyst has adopted a bullish stance on the company, recognizing strong potential despite the ongoing restructuring. He views AAL shares as a solid value opportunity. Following the upgrade, AAL stock gained nearly 3% as of writing.
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Anglo American is an international mining company that produces a diverse range of commodities, including platinum, diamonds, copper, and iron ore. However, as part of its restructuring, the company plans to exit steelmaking coal, nickel, and platinum operations, shifting its focus to core assets like copper, high-grade iron ore, and crop nutrients.
Jefferies Turns Bullish on Anglo American
Jefferies has turned bullish on AAL stock considering its strong potential after its restructuring is over. LaFemina believes that the company will be ideally placed to capitalize on increasing copper prices and stable iron ore prices.
Additionally, LaFemina anticipates that the restructured company will achieve a solid balance sheet and healthy cash flow, enabling it to provide substantial capital returns. Jefferies also highlighted that the shares were affected when the restructuring was announced, but they have since made a strong recovery.
Anglo American’s Restructuring: A Bold Step Toward Growth
In May 2024, Anglo announced a bold restructuring plan to streamline its portfolio and boost shareholder confidence. This move was largely a response to its rival BHP Group’s (AU:BHP) attempted takeover. Nonetheless, Anglo rejected the multiple offers from BHP and focused on building a simpler, more resilient business.
As part of its restructuring, the company disclosed the sale of its remaining steelmaking coal assets in Australia to U.S.-based Peabody Energy Corp. (BTU) earlier this week. Similarly, Anglo announced plans to spin off its diamond business, De Beers, in May 2024.
LaFemina’s Ranking on TipRanks
LaFemina is a four-star-rated analyst as per the TipRanks Star Ranking and is ranked #1,282 among 9,205 analysts. He carries a success rate of over 50% and has delivered an average return of 6.40% per rating.
TipRanks tracks the performance of numerous financial experts through its Star Ranking system, assessing them based on their success rate, average returns, and statistical relevance.
Are Anglo American Shares a Good Buy?
According to TipRanks’ consensus, AAL stock has been assigned a Moderate Buy rating, backed by five Buys, four Holds, and one Sell recommendation. The Anglo American share price target is 2,629.82p, which is 7% above the current trading price.
