Anglo American Downgraded at JPMorgan on Tariff Risks

Analysts at JPMorgan and Jefferies are split in their views of Anglo American (LON: AAL) shares, with one downgrading the stock and the other upgrading it in recent notes.

Despite the mixed views, Anglo American shares have remained resilient, with the stock up more than 11% in the last month and over 29% this year.

However, in a note this week, JPMorgan analyst Dominic O’Kane lowered its rating for Anglo American to Neutral from Overweight, raising the price target to 2,335p from 2,285p a share.

The investment bank said that industrial metal prices have reacted rapidly to China’s economic policy announcements, rising by 10% in the last two weeks.

However, O’Kane believes metals do not appear to be assigning meaningful risk premia to trade-related outcomes, such as higher tariffs, to be more specific, despite it being a possible risk mentioned by JPMorgan clients following the US Presidential election.

Meanwhile, at the end of November, Jefferies analyst Christopher LaFemina upgraded Anglo American to Buy from Hold, increasing the firm’s price target for the stock to 2,850p from 2,500p.

The analyst told investors in his note that his firm sees value and potential positive catalysts in Anglo’s shares. It followed a pullback in AAL’s share price from this past summer’s highs.

Furthermore, Jefferies said Anglo is trading at a 15% discount to its undisturbed sum-of-the-parts estimate and takeover possibilities resurfacing for the upgrade.