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Advisory article

KGHM copper suffers downgrade to 'sell', target price cut to PLN 110


Copper giant KGHM was downgraded to 'sell' with target price cut to PLN 110 from PLN 133 by DM BZ WBK analysts in a report dated April 27.


"We see no changes to the business model of KGHM, with the exception of a slow deterioration in KGHM International," the analysts wrote. "However, zloty-denominated copper prices fell recently from some PLN25k/t to current PLN22k/t,

which results in a double-digit cut to our EBITDA forecasts in the market prices-based model."


"KGHM could react positively to either the zloty weakening or a copper price rally (seen as risks to our call), but today the company seemingly lost its DCF- or peer-based appeal," the brokerage believes.


KGHM shares were at PLN 122.1 when the report was prepared versus PLN 122.85 on Friday at 09:24 local time.




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