Anglo American Shares: Analyst Sees Value Following Restructuring Progress

Anglo American (LON: AAL) received a bullish endorsement from Jefferies analyst Christopher LaFemina on Friday, who upgraded the stock from Hold to Buy.

The upgrade helped to push the company's shares up more than 5% during Friday's session. So far on Monday, AAL has gained a further 0.8%, adding to its recent bullish run. The stock has risen over 28% so far this year.

LaFemina also raised his price target for the mining giant from 2,500p to 2,850p, signalling confidence in the company's progress following its restructuring efforts announced earlier this year.

The stock has declined roughly 15% since the restructuring plan was unveiled in May, reflecting market scepticism over potential risks and the removal of acquisition premiums.

However, LaFemina notes Anglo has shown progress in addressing the challenges, stating that operational improvements and restructuring advancements are key drivers behind the optimism.

“We see value in Anglo,” wrote LaFemina. His updated sum-of-the-parts (SoTP) analysis suggests the shares trade at a discount, offering potential upside for investors.

Jefferies explained that the stock is currently valued at a forward price-to-earnings ratio of 12.7x for 2025, with an attributable enterprise value-to-EBITDA of 6.3x and a free cash flow yield of 4.5%.

Additionally, Jefferies highlights potential catalysts for further growth, including free cash flow expansion and a renewed possibility of mergers and acquisitions.

The analyst believes these factors, alongside the operational momentum, position Anglo American as an attractive investment at current levels.