Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>Copper prices continue to remain above 13,000 USD/ton despite a small correction. Stocks have declined much more amid market weakness, resulting in better risk-reward on copper names.</li>
<li>Stocks that stand out are <a target="_blank" rel="noopener">ERO Copper (ERO US)</a>, trading at 6.8x PE and 4.4x EV-EBITDA, and <a target="_blank" rel="noopener">Lundin Mining (LUN CN)</a>, 16.4x PE and 6.9x EV-EBITDA, for how cheap they are.</li>
<li>The bellwether copper pure plays are <a href="https://www.smartkarma.com/entities/antofagasta-plc" target="_blank" data-smartkarma-citation="entities:21814:1" rel="noopener">Antofagasta PLC (ANTO LN)</a> at 7.8x EV-EBITDA and <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> at 13.5x EV-EBITDA. All numbers based on FY26e copper at 13,000 USD/ton.</li>
</ul>


Copper prices continue to remain above 13,000 USD/ton despite a small correction. Stocks have declined much more amid market weakness, resulting in better risk-reward on copper names.
Stocks that stand out are ERO Copper (ERO US), trading at 6.8x PE and 4.4x EV-EBITDA, and Lundin Mining (LUN CN), 16.4x PE and 6.9x EV-EBITDA, for how cheap they are.
The bellwether copper pure plays are Antofagasta PLC (ANTO LN) at 7.8x EV-EBITDA and Southern Copper (SCCO US) at 13.5x EV-EBITDA. All numbers based on FY26e copper at 13,000 USD/ton.


Copper Price Correction: Four Stocks To Look At

<ul>
<li>
 FY26E net income of US$401M (+52% YoY) reflects realized copper at ~$5.90/lb and full-year Tucumã contribution; EBITDA margin widens to 61.5%, the highest in the company's history.</li>
<li>
Three-Mine platform + Furnas optionality: Caraíba (long-life underground Cu), Tucumã (high-margin open-pit Cu ramping to 35-40 kt), and Xavantina (ultra-high-grade Au) generate diversified cash flows, while Furnas provides optionality</li>
<li>
 ERO trades at 4.5x FY26E EV/EBITDA and 6.9x P/E at current copper prices, a substantial discount to copper peers (7-9x). Net debt leverage will pave the way for capital returns.</li>
</ul>



 FY26E net income of US$401M (+52% YoY) reflects realized copper at ~$5.90/lb and full-year Tucumã contribution; EBITDA margin widens to 61.5%, the highest in the company's history.

Three-Mine platform + Furnas optionality: Caraíba (long-life underground Cu), Tucumã (high-margin open-pit Cu ramping to 35-40 kt), and Xavantina (ultra-high-grade Au) generate diversified cash flows, while Furnas provides optionality

 ERO trades at 4.5x FY26E EV/EBITDA and 6.9x P/E at current copper prices, a substantial discount to copper peers (7-9x). Net debt leverage will pave the way for capital returns.


Ero Copper (ERO US): A 4.5x EV-EBITDA Pure Copper Play With Growth Is Rare

<ul>
<li>
<a href="https://www.smartkarma.com/entities/freeport-mcmoran-inc" target="_blank" data-smartkarma-citation="entities:12491:1" rel="noopener">Freeport McMoRan's (FCX US)</a> Grasberg mine, which was scheduled to return to full production in 2027, <a href="https://www.channelnewsasia.com/business/freeport-indonesia-adjusts-grasberg-production-recovery-full-resumption-delayed-until-2028-6109926" target="_blank" rel="noopener">has now pushed its recovery to </a><a href="https://www.channelnewsasia.com/business/freeport-indonesia-adjusts-grasberg-production-recovery-full-resumption-delayed-until-2028-6109926" target="_blank" rel="noopener">2028</a>. The mine is running at 40-50% utilization.</li>
<li>Further pressure on the cost side as Indonesia proposed a step-up in royalties in gold, copper, and tin mining. We are already witnessing <a href="https://news.metal.com/newscontent/103887752-SMM-Copper-Flash-High-Diesel-Power-Generation-Costs-in-DRC-Put-SX-EW-Copper-Smelters-Under-Pressure" target="_blank" rel="noopener">rising fuel prices</a>/<a href="https://www.spglobal.com/energy/en/news-research/latest-news/metals/041526-chinas-sulfuric-acid-restrictions-set-to-squeeze-miners" target="_blank" rel="noopener">lower sulfuric acid supplies</a>. </li>
<li>We see that elevated copper prices are resulting in great Q1 results from <a href="https://www.smartkarma.com/entities/antofagasta-plc" target="_blank" data-smartkarma-citation="entities:21814:1" rel="noopener">Antofagasta PLC (ANTO LN)</a> / <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> and <a href="https://www.smartkarma.com/entities/lundin-mining-corp-92352503-3781-4fcb-a4db-62e6f6343783" target="_blank" data-smartkarma-citation="entities:25356:1" rel="noopener">Lundin Mining (LUN CN)</a> </li>
</ul>



Freeport McMoRan's (FCX US) Grasberg mine, which was scheduled to return to full production in 2027, has now pushed its recovery to 2028. The mine is running at 40-50% utilization.
Further pressure on the cost side as Indonesia proposed a step-up in royalties in gold, copper, and tin mining. We are already witnessing rising fuel prices/lower sulfuric acid supplies. 
We see that elevated copper prices are resulting in great Q1 results from Antofagasta PLC (ANTO LN) / Southern Copper (SCCO US) and Lundin Mining (LUN CN) 


Grasberg Slips, Copper Rips: Sulfuric Acid Shortages and Diesel Costs Add Fuel

Emerging Markets Cross-Asset Strategist, Emvest Partners

Guillaume Coutant

Emerging Markets Cross-Asset Strategist

Cross-Asset Emerging Markets Technical Research

Emvest Partners

Emvest Partners is the leading independent French financial analyst specializing in Emerging Markets for  Asset Managers, Hedge Funds and Family Offices. The studies provided by Emvest Partners are based on a top-down, cross-asset and relative-value approach of the financial markets. The articulation of macroeconomic analysis and technical analysis improves the consistency of the recommendations, the mitigation of risks of error and a significant improvement in performance.

Thematic (Sector/Industry)

<ul><li>
<a href="https://www.smartkarma.com/entities/22872" target="_blank" data-smartkarma-citation="entities:22872:1">Copper (COPPER COMDTY)</a> (HG1 Comdty)is approaching from key midterm resistance levels at 335/340, with exhaustion signals taking place. Therefore, a 12/17% setback should be expected over the coming months.</li></ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/044/952/original/HG1%20Comdty%20%28Generic%201st%20'HG'%20Fut%202018-02-05%2019-09-05.png?1519036778" class="editor-image img-responsive" data-smartkarma-image-id="44952"></figure><ul>
<li>Linked stocks like <a href="https://www.smartkarma.com/entities/21814" target="_blank" data-smartkarma-citation="entities:21814:1">Antofagasta PLC (ANTO LN)</a>, <a href="https://www.smartkarma.com/entities/12491" target="_blank" data-smartkarma-citation="entities:12491:1">Freeport Mcmoran Inc (FCX US)</a> are expected to relatively underperform against other metals companies.</li>
<li>In parallel, <a href="https://www.smartkarma.com/entities/26756" target="_blank" data-smartkarma-citation="entities:26756:1">CLP (USDCLP CURNCY)</a> is also showing bottomish signals close to 595. A bullish reaction should be taking place towards 650 even 680.</li>
</ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/044/955/original/USDCLP%20Curncy%20%28USD-CLP%20X-RATE%29%20T%202018-02-05%2019-16-49.png?1519036988" class="editor-image img-responsive" data-smartkarma-image-id="44955"></figure><ul><li>CLP…</li></ul>


Copper (COPPER COMDTY) (HG1 Comdty)is approaching from key midterm resistance levels at 335/340, with exhaustion signals taking place. Therefore, a 12/17% setback should be expected over the coming months.
Linked stocks like Antofagasta PLC (ANTO LN), Freeport Mcmoran Inc (FCX US) are expected to relatively underperform against other metals companies.
In parallel, CLP (USDCLP CURNCY) is also showing bottomish signals close to 595. A bullish reaction should be taking place towards 650 even 680.
CLP…

Chile Peso and Copper at Key Levels : Correction

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

All regions—both geographic and economic—share a common through-line: bullish technicals. And we expect this trend to continue, an outlook supported by a cast of multi-year base patterns (esp. in Europe and Japan), weakness in defensive sectors, and strength in cyclicals. In today’s report we highlight the follow themes:<ul><li>Buy energy, miners. Discussed above... see pages 3-6</li><li>Autos are strengthening. Developed market auto stocks, a lagging group for the past three years, present an opportunity. Names like BMW (BMW-DE), Ford (F), Peugeot (UG-FR), and Toyota (TM) are breaking out/bullishly inflecting... see pages 7-8</li></ul>

All regions—both geographic and economic—share a common through-line: bullish technicals. And we expect this trend to continue, an outlook supported by a cast of multi-year base patterns (esp. in Europe and Japan), weakness in defensive sectors, and strength in cyclicals. In today’s report we highlight the follow themes:Buy energy, miners. Discussed above... see pages 3-6Autos are strengthening. Developed market auto stocks, a lagging group for the past three years, present an opportunity. Names like BMW (BMW-DE), Ford (F), Peugeot (UG-FR), and Toyota (TM) are breaking out/bullishly inflecting... see pages 7-8

Int'l Compass: Inflation Trade Is Gathering Steam -- Buy Energy, Miners, Autos; Stay Overweight EM

United Kingdom

Antofagasta plc is a Chilean multinational conglomerate primarily focused on copper mining, with operations concentrated in Chile. The company operates four copper mines, producing copper cathodes and concentrates, along with gold, silver, and molybdenum as by-products. Additionally, it has a transport division providing rail and road cargo services for mining customers in northern Chile. Antofagasta was incorporated in London in 1888 and is headquartered in London, England.

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Antofagasta (ANTO LN)

Copper Price Correction: Four Stocks To Look At

We look at four stocks post the correction in share prices, provide a sensitivity analysis for different copper prices, and present a base-case...

Sameer Taneja

Ero Copper (ERO US): A 4.5x EV-EBITDA Pure Copper Play With Growth Is Rare

Brazil's copper champion exits a multi-year capex supercycle into an era of surging free cash flow powered by record copper prices. 4.5x EV-EBITDA...

Sameer Taneja

Grasberg Slips, Copper Rips: Sulfuric Acid Shortages and Diesel Costs Add Fuel

Bullish on copper for 2026/2027: Grasberg delays, rising diesel costs, and sulfuric acid shortages tighten supply, widening the deficit.

Sameer Taneja

Chile Peso and Copper at Key Levels : Correction

Copper (COPPER COMDTY) (HG1 Comdty)is approaching from key midterm resistance levels at 335/340, with exhaustion signals taking place. Therefore,...

Guillaume Coutant

Int'l Compass: Inflation Trade Is Gathering Steam -- Buy Energy, Miners, Autos; Stay Overweight EM

All regions—both geographic and economic—share a common through-line: bullish technicals. And we expect this trend to continue, an outlook...

Vermilion Research

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