Broker snap: Opinions divided on Antofagasta

29th Jan 2014 12:51

Brokers were divided on Wednesday on Antofagasta after the Chilean miner reported a record year of copper production for 2013 supported by a strong output performance in the fourth quarter.Antofagasta said copper production in the last three months of the year rose 4.9% from the third quarter to 182,900 tonnes, with all major projects contributing to growth. But 2014 guidance for 2014 for copper, gold and molybdenum shows production set to ease slightly, although above at least some analysts' forecasts.The news prompted Westhouse Securities to upgrade its earnings forecasts for Antofagasta in 2013, 2014 and 2015.Westhouse raised its target price to 1,060p and kept its buy recommendation on the stock."The low cost production profile, augmented by volume growth and the group'sstrong cash position, ensure Antofagasta remains one of our preferred stocks in the mining sector," the broker said in a note.Investec said relatively stable production guidance for the 2014 full year meant improved performance was likely to offset declining grades, but it still advised investors to offload the stock.The broker said: "We therefore see scope to upgrade our numbers and will revisit our target price. We still expect this to imply the company remains over-valued and retain our sell."Shares in Antofagasta rose 5.8% to 870p at 13.35 in London.PW