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Peel Hunt downgrades Kaz Minerals to 'hold'

Wed, 02nd Nov 2016 10:51

(ShareCast News) - Peel Hunt downgraded Kaz Minerals to 'hold' from 'add' after its third-quarter production report but upped the price target to 275p from 200p as it took a look at the copper sector.It noted the shares are up 30% in the last month and 180% in the year to date."While Kaz Minerals is likely to see strong EBITDA growth in 2017 and 2018 irrespective of the copper price move, in the short term we believe the shares have run too far."In addition, Peel said the shares are pricing in much of its anticipated upside in copper prices over the next two to three years.The brokerage cut its 2016 copper price estimates slightly, with its spot forecast now at $4,760 per tonne compared to 4,836 previously.Peel Hunt nudged up its price target on hold-rated Antofagasta to 580p from 575p, saying the weaker cable rate offsets lower volumes and a lower target multiple. It left its rating unchanged as the shares look close to fair value.The brokerage said Atalaya and Central Asia Metals remain its copper 'buy' ideas. It trimmed its target price on Atalaya to 175p from 180p due to lower copper prices, but lifted its target on Central Asia to 245p from 225p, pointing out that the cash flows backing the dividends are US dollar-denominated.At 1100 BST, Kaz shares were down 2.4% to 278.80p while Antofagasta shares were down 1.1% to 547p.
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