Broker snap: Evolution upgrades Antofagasta to neutral

15th Nov 2011 13:06

With Antofagasta's third quarter results showing an improvement at its Esperanza plant in Northern Chile, Evolution Securities has moved its recommendation on the stock from sell to neutral.The firm warned in June that the ramp-up of the Esperanza plant was taking longer than expected, causing it to scale back its total copper production guidance for 2011 from 715,000t to 620,000-640,000t. Last week's statement assured that it is still on track to hit this target, with Esperanza production increasing from 21,900t to 25,200t quarter-on-quarter." Interestingly, Esperanza was Antofagasta's lowest cost (after by-product credits) operation," the broker said.Evolution cuts its target price from 1,200p to 1,110p to reflect the "challenging global economic outlook", but seeing as though the shares have fallen from nearly 1,500p to 1,155p since July, the broker says there is now limited downside to the new target.Despite the upgrade, shares were heading 2.72% lower to 1,143p as of 12:52 in London, falling in line with broader mining sector.BC