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(Sharecast News) - Citi downgraded Anglo American on Friday to 'neutral' from 'buy' and cut the price target to 2,800p from 3,000p as it said that sum of the parts upside appears limited.
"The marked shift in the investment case of AAL last year from operational recovery to delivering on its proposed restructuring has led to a circa 30% share price outperformance since the announcement in May 2024," the bank said.
"The current share price reflects a reasonable probability for bulk of its portfolio optimisation measure coming to fruition, and the corresponding re-rating of the remainco business."
Citi said the sum of the parts valuation at 2,700p a share now implies limited upside, with valuations at 6.5x estimated 2025 EBITDA at a premium to Anglo's global diversified mining peer group.
"With limited upside from current levels, our rating on the stock moves to neutral, with revised price target," it said.
Citi said a potential rally in commodity prices or renewed M&A interest from the global miners are key upside risks to the stock.
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