The average target price of AMS.JO is 66542 and suggests 10% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 80000.0. This translates into 9% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 48800.0. This is equivalent to 34% downside potential in the worst case. 

Anglo American Platinum Limited engages in the production and supply of platinum group metals, base metals, and precious metals in South Africa, Asia, Europe, and internationally. It produces platinum, palladium, rhodium, ruthenium, iridium, and osmium, as well as gold, nickel, copper, cobalt sulphate, sodium sulphate, and chrome. The company was formerly known as Anglo Platinum Ltd. and changed its name to Anglo American Platinum Limited in May 2011. The company was incorporated in 1946 and is headquartered in Johannesburg, South Africa. Anglo American Platinum Limited is a subsidiary of Anglo American South Africa Investments Proprietary Limited.

S. Africa

Anglo American Platinum Limited

Basic Materials

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been moderate and on par with its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. The company distributes nearly all its profit as dividends (payout ratio above 90%, a negative factor). It will not be easy to sustain such an extreme payout ratio. It may also indicate a company's lack of profitable growth opportunities, which suggests doubtful prospects. On average, the company pays dividends twice a year. 

AMS.JO reported revenue of ZAR 108 987mn in the last 12 months, down 13% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 46% from FY23 to ZAR 26.86. Market expects EPS to reach ZAR 43.93 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 5ppts over past six months and grown 13ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 19.1% in the last 12 months, up from 18.3% in FY23. 

Historically, AMS.JO has reported good net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 6.5%, down from 10.5% in FY22. 

Anglo American Platinum Limited reported a return on equity (RoE) of 7.0% in the last 12 months, down from 7.2% in FY23. The market consensus projects an RoE of -3.5% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 4.2% in the last 12 months, an increase from 4.1% in FY23. The market analysts predict that RoA will be -2.1% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 5.7%, below the peers. The consensus estimate for FY24 for RoCE is -4.9%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.1 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

AMS.JO has average trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is unstable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to slow historical revenue growth.

In highly turbulent market conditions, AMS.JO is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, AMS.JO is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to notable. 

From both historical and forecast perspectives, the stock is underpriced compared to similar stocks. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITDA, underpriced on P/FCF. 

Anglo American Platinum Limited

ZAC 73682

4

Anglo American Platinum Limited

ZAC 73682

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

ZAC 73682

About

About

About

About