Halister News

(Bloomberg) -- Anglo American falls as much as 8%, leading decliners on the Stoxx 600 Basic Resources index, down 1.9% at 9:10am in London; worst performing sector on the Stoxx Europe 600 index.

• Co. says 2Q Kumba iron-ore production fell 15%
• Cuts full-year copper target on bad weather

CITI (sell)

• Co.’s 2Q production results were “mostly lower than our expectations,”
  • Sees low single-digit percentage downgrades to consensus earnings ests. for 2016; remains concerned about long- term outlook for co.
  • Says co. remains hamstrung by the debt incurred on previous poor capital management, is a forced seller of assets at a low point in the commodity cycle

CANACCORD (sell)

• Co. 2Q production below est., but maintained its production guidance for the year across most commodities, except copper
• Co. 2Q result a slight negative near term, but remains confident co. will hit its guidance across most commodities

BERNSTEIN (outperform)

• Co. results were slightly disappointing on the iron ore and

copper front, though were more positive in PGMs and nickel, with some positive signs in diamonds

• Specific issues at Kumba Iron Ore contributed to production coming in below est., including heavy rainfall causing a safety stoppage
• Copper was also adversely affected by extreme weather at Los Bronces, with unseasonal snowfall causing much lower grades to be mined
• Diamond output fell as expected, in-line with the plan to reduce output in response to market conditions
• Execution of the restructuring effort and disposals process remain key to the investment case

INVESTEC (sell)

• Co.’s y/y declines in output a largely a function of adjusting production profile for tougher environment
• Impact to consensus numbers should be relatively minor

• NOTE: Of 28 analyst ratings, 3 are buys, 8 holds and 17 sells, with an average PT of 641.9p implying ~16% downside