March 26, 2019 / 7:44 AM / 8 months ago

BUZZ-Antofagasta: "Negative catalysts ahead" - Barclays cuts

** Barclays downgrades Antofagasta to “underweight” as it sees “downside catalysts ahead”

** Brokerage expects production to fall in 2020 which is not fully reflected in consensus yet (cons. EBITDA showing increase YoY in 2020)

** Barclays sees declining grades and rising opex/capex driving declining FCF close to zero at spot over the next 5 years

** “As such, future expansions should be at higher capital intensity/lower returns that existing business,” says Barclays

** This is an industry-wide issue, it adds and says prefers cos that have already sunk capex and/or are on the cusp of stronger growth with catalysts: First Quantum Minerals and KAZ Minerals PLC (both “overweight”)

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