Leading bank keeps faith with miners despite recent sell-off
Deutsche Bank has told clients that the case for owning mining stocks remains intact, even after a bruising few weeks for the sector.
Analyst Liam Fitzpatrick said the miners had lost momentum after a strong start to the year, weighed down by broader economic headwinds.
A stronger US dollar, softer Chinese economic data and volatility in shares linked to artificial intelligence data centres have all dragged on performance.
Fitzpatrick argued that the underlying fundamentals were still solid, though he warned that share prices could stay choppy in the near term.
He expects that to persist until the US Federal Reserve, the country’s central bank, signals a less aggressive stance on interest rates.
Valuations looked full at the start of June, but a correction of roughly 15% since then has reopened pockets of value, according to the bank.
Glencore PLC (LSE:GLEN), the London-listed miner and commodities trader, features among Deutsche’s top picks across the sector.
The bank kept its ‘buy’ rating and lifted its price target to 630p from 610p.
Anglo American PLC (LSE:AAL) also ranks among the preferred names, alongside US-listed Freeport-McMoRan and Canada’s Teck Resources.
Deutsche was less enthusiastic elsewhere in the UK-listed space.
It reiterated a ‘sell’ rating on Antofagasta PLC (LSE:ANTO), the Chilean copper producer, though it nudged its target up to 3,400p from 3,100p.
It also stuck with a ‘hold’ rating on BHP, the world’s largest listed miner, raising its target to 2,700p from 2,600p.
The mixed verdict underlines Deutsche’s view that stock selection matters more than broad sector exposure in the current climate.
