Berenberg Upgrades Antofagasta to 'Buy,' Citing Copper Selloff as Entry Point

Berenberg has upgraded shares of copper producer Antofagasta to “buy” from “hold”, advising clients that a recent selloff in the copper market has created a compelling investment opportunity. The investment bank maintained its 4,400 pence price target, suggesting the current share price offers an attractive entry point for a high-quality business with significant growth prospects.

Growth Profile Drives Bullish Case

Berenberg's positive outlook is underpinned by Antofagasta's strong growth trajectory, with the firm forecasting a 27% increase in copper volumes to 818,000 tonnes by 2028, up from 646,000 tonnes in 2026. This growth is expected to drive a significant increase in free cash flow, which analysts project will rise to $3.1 billion in 2027—a 6.2% yield—from approximately $700 million in 2026.

The production increase is anticipated from two key projects in Chile:

• Los Pelambres mine: Higher grades are expected to boost volumes to 373,000 tonnes in 2028.
• Centinela concentrator project: The new facility is forecast to lift volumes to 329,000 tonnes in 2028 and 360,000 tonnes in 2029.

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Analysts also noted that higher volumes of by-products like molybdenum and gold will help control costs, supporting robust EBITDA margins projected between 66% and 68%.

Market Context

The upgrade follows a period of volatility in the copper market. According to Berenberg, prices had recently approached $15,000 a tonne due to supply disruptions, tight physical markets, and speculation about potential U.S. tariffs on copper imports. The firm does not expect such tariffs to be implemented, citing their potential inflationary impact.

A subsequent market correction pushed copper prices down to around $14,200 a tonne. Berenberg views this outsized selloff in both the commodity and related equities as the catalyst that has created attractive entry points for investors in stocks like Antofagasta.