Diversified mining groups are shifting their capital allocation strategies toward copper expansion to secure higher market valuations, according to a research report from investment bank UBS.
Analyst Daniel Major noted that major miners navigated their first-half financial results without severe guidance downgrades despite persistent cost inflation.
The broker maintained a buy rating on Anglo American with a £46 price target, naming the group and its partner Teck Resources Ltd (TSX:TECK.B) as its preferred diversified investment.
Anglo American is restructuring its portfolio through the sale of DeBeers to create a focused copper producer capable of growing output by up to 50% over five years.
Teck Resources also holds a buy rating with a price target of 105 Canadian dollars following three consecutive quarters of earnings beats and robust cash generation.
UBS retained a buy recommendation on Freeport-McMoRan Inc (NYSE:FCX, XETRA:FPMB) with a $77 price target, citing encouraging operational recovery at the Grasberg mine in Indonesia.
The bank maintained a neutral stance on BHP with a price target of £29.50, despite copper contributing 54% of group earnings in the latest financial year.
Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) remains rated neutral with a £73 price target as the group prepares to announce approximately $5 billion of non-core asset sales.
Glencore PLC (LSE:GLEN) also holds a neutral rating with a 570 pence price target, supported by strong trading earnings and an upcoming secondary listing in Australia.
In afternoon trading, shares in Anglo American rose 1.8% to 3,899 pence, Rio Tinto gained 0.6% to 7,160 pence, Glencore added 0.8% to 555 pence, and BHP slipped 0.4% to 3,254 pence.