Anglo American Two announcements: 1) Steelmaking coal sale for max $3.9bn (+ve); 2) Collahuasi desalination plant (-ve)

Research evidence excerpt

Anglo American Two announcements: 1) Steelmaking coal sale for max $3.9bn (+ve); 2) Collahuasi desalination plant (-ve)

Dominic O'Kane AC Europe Equity Research

(44-20) 7742-6729 18 May 2026 C A Z E N O V E

dominic.j.okane@jpmorgan.com

Investment Thesis, Valuation and Risks

Anglo American (Underweight; Price Target: 2,780p)

Investment Thesis

Our Anglo American recommendation is Underweight. We believe global geopolitical risks

and higher energy prices pose downside to metal prices in 2026, specifically copper. Our

earnings forecasts assume a downside scenario for copper and iron ore prices, under which

we forecast downside risk for Anglo’s market value and consensus forecasts. In 2024 Anglo

commenced a major corporate restructuring involving: sale of its Coal assets (completed),

de-merger of Anglo Platinum, divestment of its Diamonds and Nickel divisions. This will

leave an Anglo streamlined along Copper and high grade Iron Ore. We see Anglo’s shares

as fully valued relative to peers.

Valuation

We utilise a granular, sum-of-the-parts Dec-27 price target methodology. Our Fair Value is

calculated as the average of: (1) 0.9x NPV across each individual division; and (2)

individual divisional EV/EBITDA target multiples for 2028E EBITDA (ranging between

Copper at 10.0x, Kumba Iron Ore at 5.5x). Our examination of Fair Value seeks to provide

investors with insights into Anglo American’s intrinsic equity value across its divisions,

reflecting long-dated asset value (NPV) on comparable company trading multiples (EV/

EBITDA). Our valuation method is calculated from Anglo American’s attributable cash

flows and EBITDA, not based on consolidated. Our NPV is based on a sum-of-the-parts

DCF valuation using a 10.5% discount rate, with exception of Copper (8.6%).