Goldman Sachs Reinstates Anglo American plc (AAUKY) at Sell; Problem after Problem

October 15, 2012 10:24 AM EDT Send to a Friend
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Price: $10.58 -0.84%

Rating Summary:
    4 Buy, 3 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 24 | Down: 28 | New: 14
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Goldman Sachs reinstates coverage on Anglo American plc (OTC: AAUKY) with a Sell with a price target of 1,650p.

The firm sees myriad problems across the portfolio: "Its platinum division (Anglo Platinum; Sell, last close R405) has been negatively exposed to a very weak European autos market (hurting PGM prices) and more recently strikes at its major mines in South Africa (hitting production). These strikes have spread to Kumba (Sell, last close R501.6) from which the company made c.40% of its 1H12 EBITDA, and which has also seen the iron ore price fall 25% in 2012 to date. De Beers, its diamond unit, is currently experiencing weaker pricing, reflecting sales growth fears, and its copper unit is experiencing lower than planned production from Los Bronces (Chile) and its Collahuai JV (also Chile). Lastly, the met coal price has fallen sharply on the back of weaker global steel demand, from c.US$280/tonne at the beginning of 2012 to c.US$145/t currently. Anglo has also seen its major near-term growth project, Minas Rio (iron ore, Brazil) delayed by at least 18-months and perhaps by over two years."

For an analyst ratings summary and ratings history on Anglo American plc click here. For more ratings news on Anglo American plc click here.

Shares of Anglo American plc closed at $14.61 yesterday.


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