Negative catalysts lacking at Antofagasta, says Morgan Stanley and UBS

4th Jul 2014 12:33

Shares in copper miner Antofagasta were continuing their recent upward trend on Friday after analysts at both Morgan Stanley and UBS cited a lack of near-term negative catalysts.Morgan Stanley upgraded its rating on the stock from 'underweight' to 'equalweight', saying that "negative catalysts [have] played out"."With ANTO now on more reasonable (relative) metrics following a year-to-date de-rating and indications that costs could positively surprise versus consensus, further downside looks limited," the bank said in a research report.Morgan Stanley added that "lacklustre" free cash flow and low volume growth prevents it from taking a more optimistic stance.However, the stock's valuation "has become more reasonable".UBS analysts also gave sentiment a boost after removing Antofagasta from their "Least Preferred" list, saying that strong copper and molybdenum prices, along with a weaker Chilean peso, "could underpin first-half results".Antofagasta was trading 1% higher at 828.5p by 12:19.After an 8% jump in the stock over the past five days alone, the shares are trading at broadly the same level as at the start of January, but remain well below the 2014 closing high of 959p reached in February.BC