Liberum Capital Downgrades Anglo American to “Sell”

Mining Weekly reported that Liberum Capital has downgraded Anglo American plc (LSE:AAL) to a “sell” rating on expectations that striking at Anglo American Platinum Ltd.’s (OTCMKTS:AGPPY) South African operations is set to accelerate. Previously, the investment banking firm had rated the company “hold.”

As quoted in the market news:

‘Anglo American is a higher risk investment proposition than its peers. Over half the company’s profits originate in South Africa and its major growth projects are greenfield.

‘Despite this, the shares trade at a premium, offer between 10% and 25% less yield than its peers and its rising debt levels limit future capital returns. While we anticipate some turnaround of underperforming assets, we have downgraded the company after recent outperformance,’ the company said in a statement on Monday.

Moreover, Anglo American shares now offered less yield than its peers, without the potential for additional capital returns in the next three years.

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