A Hold recommendation has recently been issued to the global leader in mining and natural resource company, Anglo American, Plc. (AAUK) by Zacks senior mining sector analyst Duong Vuong, CFA. Here's what his latest update had to say:
'We are maintaining a Hold recommendation on Anglo American. The company is benefiting from strong demand for commodities around the globe and increase production. However, risks to global economic growth remain, and the strength of the South African rand could have a significant impact on future earnings.
'The company said it will sell its tarmac business to focus on the mining industry, after announcing in May that it was evaluating the unit's fit within the company's scheme of things. The disposal is expected to be completed in the first half of 2008. The tarmac business may attract bids of at least $6 billion, and could be subject to offers from construction companies, as well as private equity firms.
'Overall, the company said demand growth for its products was vigorous. Slower U.S. economic growth had been offset by the strength across the rest of the globe, most notably in the Asian economies, where both China and India continue to grow strongly.
'The stock is trading at 17.1x our 2007 EPS estimate, a multiple above that of its peers at an average of 13.5x. Our six-month target price is $35.00.'
Read the full analyst report on AAUK.
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