Credit Suisse downgrades Anglo American ahead of 'higher risk phase'

15th May 2014 13:06

Credit Suisse has cut its rating for Anglo American from 'outperform' to 'neutral', saying that the mining company is now moving into a 'higher risk phase'.The bank upgraded the stock at the start of the year, driven by increased confidence in the targeted cost savings and the potential for the company to accelerate divestments.Credit Suisse said: "This still stands, but we now see the returns improvement as largely priced in and Anglo's underlying commodity momentum is weak. "We think the group strategy makes sense and the medium-term investment case attractive, but the upside case is now moving to a higher risk phase dependent on project delivery and divestment success."Nevertheless, the bank has lifted its target price for the stock from 1,800p to 1,850p, having raised its earnings forecasts slightly to reflect increased cost savings assumptions. However, its forecasts are still some 10% below consensus.The bank said it is awaiting a "more attractive entry point" before turning positive on the stock.The stock was trading 0.1% lower at 1,640p by 13:15 on Thursday.BC