Broker tips: Miners, Capita

(Sharecast News) - JPMorgan upgraded the global mining and metals sector to 'overweight' from 'underweight' on Monday, as it said that Rio Tinto, Antofagasta, Fresnillo & SSAB are its European key 'overweights'.

The bank noted that the mining and metals sector has underperformed MSCI Europe by around 50% since January 2023, with M&M equities having underperformed industrial metal prices by about 20% since January 2024.

JPM said the de-coupling/de-rating for equity multiples is an "active inbound-enquiry from investors".

The bank said its 2025 sector outlook expects a "V-shaped" recovery for metal prices and M&M equities in late Q1 as China expands economic policy support and JPM Commodities Research forecasts 15% upside to current copper prices.

It expects the copper price to reach $11,500/t in in the second quarter of 2026.

"We specifically recommend adding exposure to miners with exposure to copper, aluminium, gold, and/or corporates that are strategically vulnerable," JPM said.

RBC Capital Markets upgraded Capita on Monday to 'outperform' form 'sector perform' and lifted the price target to 2,000p from 1,700p as it said the risk/reward was now in favour.

The bank said full-year results and guidance were as expected.

"The new news was greater disclosure around the Experience division. Pensions Solutions business is making much more money than we thought and Contact Centre business much less, in fact nothing," RBC said.

"This has positive implications for our sum-of-the-parts valuation."

RBC said it believes the "risk reward is now in favour" and noted "we are at last getting closer to the point Capita becomes free cash flow positive".