MARKET REPORT: Anglo American rallies as analysts again shake up

Having made further steps towards a major restructuring of its business, Anglo American got support from analysts at Jefferies, who upgraded their rating for the blue-chip miner to ‘buy’ from ‘hold’.

Though there are still risks around the restructuring, which has seen Anglo American sell off its coal and platinum assets, the Jefferies analysts said a drop in the company’s share price leaves the stock looking good value.

The US bank’s analysts said that after the restructuring is complete, Anglo American will be well-positioned to benefit from a rising copper price and a resilient iron ore price.

The company should also have a strong balance sheet and robust cash flow, enabling it to deliver large capital returns.

With Anglo American shares down around 15 per cent since the restructuring was unveiled in May, the Jefferies analysts also lifted their share price target for the stock to 2850p from 2500p.

Anglo American’s shares topped the FTSE 100 risers, up 5.4 per cent, or 129.5p, to 2520.5p.

Right direction: Restructuring has seen Anglo American sell off its coal and platinum assets

On the final trading session of November, the FTSE 100 index edged up 0.1 per cent, or 6.08 points, to 8287.3. 

Over the course of the month, the blue-chip index has gained around 2 per cent. With just one more month to go until the end of 2024, it is ahead around 6.5 per cent but remains well below the all-time peak of 8474.41 hit in May. 

The FTSE 250 index crept up 0.04 per cent, or 8.79 points, to 20771.57p, but was also up around 2 per cent for the month, putting it about 5 per cent higher so far this year.

Broker comment was also a spur to gains for blue-chip engineer IMI, which added 3.3 per cent, or 58p, to 1820p after analysts at Bank of America Merrill Lynch upgraded their rating to ‘buy’ in a big note on the engineering sector.

But FTSE 100-listed defence engineer BAE Systems dropped 4.9 per cent, or 63p, to 1227p on the back of a downgrade to ‘underperform’ by the Bank of America analysts.

And FTSE 250-listed defence peer QinetiQ also suffered, losing 3.5 per cent, or 15p, to 415.2p as the same analysts also cut its rating to ‘underperform’.

Retailers were in focus on Black Friday, a key shopping date for the sector. Next gained 2.2 per cent, or 218p, at 10080p as analysts at Berenberg started coverage of the clothing and homewares stores group at ‘buy’. But rival M&S shed 0.3 per cent, or 1p, to 382.7p as the Berenberg analysts adopted a less bullish view, starting coverage with a ‘hold’ rating.

Elsewhere, stocks with exposure to Georgia suffered after the government of the former Soviet republic suspended moves to join the European Union, leading to violent clashes between demonstrators and riot police. Topping the FTSE 250 fallers list, TBC Bank shed 5.9 per cent, or 190p, to 3030p and Bank of Georgia dropped 6.2 per cent, or 310p, to 4685p.

Among the small caps, gaming minnow Webis soared 7.1 per cent, or 0.01p, to 0.15p as it posted resilient annual results, a last hurrah after recently announcing its intention to delist from AIM to reduce costs as it seeks to grow its business in North America.