Stock Analysis & Valuation Anglo American plc (NGLB.DE)

• Previous Close: €26.35
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	18.60	-29
Intrinsic value (DCF)	11.95	-55
Graham-Dodd Method		n/a
Graham Formula	5.20	-80

Strategic Investment Analysis

Company Overview

Anglo American plc (NGLB.DE) is a globally diversified mining company headquartered in London, United Kingdom. Founded in 1917, the company explores and produces a broad portfolio of essential commodities, including diamonds (through De Beers), copper, platinum group metals (PGMs), metallurgical and thermal coal, iron ore, nickel, polyhalite, and manganese. Anglo American operates across multiple continents, supplying raw materials critical for industrial, energy, and luxury markets. The company is a key player in the Basic Materials sector, with a strong focus on sustainable mining practices and responsible resource extraction. Its diversified asset base mitigates commodity price volatility, while its technological investments aim to improve efficiency and reduce environmental impact. Anglo American's London listing (LSE: AAL) and Frankfurt listing (XETRA: NGLB.DE) provide global investors access to its operations.

Investment Summary

Anglo American presents a mixed investment case. The company's diversified mining portfolio offers exposure to critical industrial and luxury commodities, providing some resilience against sector-specific downturns. However, its FY 2023 net loss of €3.07 billion and negative EPS (-€2.53) reflect operational challenges, including cost inflation and weaker commodity prices. Positives include strong operating cash flow (€8.1 billion) and a solid liquidity position (€8.17 billion cash). The dividend yield (€0.57 per share) may appeal to income-focused investors, but high total debt (€18.21 billion) and substantial capex (€5.61 billion) warrant caution. The stock's beta of 0.98 suggests market-average volatility. Investors should weigh Anglo American's long-term commodity exposure against cyclical risks and its ability to execute cost-saving initiatives.

Competitive Analysis

Anglo American competes in the capital-intensive global mining sector, where scale, resource quality, and operational efficiency are critical. Its competitive advantages include: (1) Diversification across high-demand commodities, reducing reliance on any single market; (2) Ownership of world-class assets like De Beers (diamonds) and Collahuasi (copper); (3) Strong positions in PGMs and premium-quality iron ore; and (4) A focus on sustainable mining, appealing to ESG-conscious investors. However, Anglo American lacks the sheer scale of giants like BHP or Rio Tinto, limiting its bargaining power in some markets. Its coal exposure (metallurgical and thermal) faces long-term structural headwinds due to energy transition trends. The company's technological investments in automation and clean energy could enhance efficiency but require sustained capex. In copper and nickel—key for electrification—Anglo American is well-positioned but faces fierce competition from specialized players like Freeport-McMoRan. Its diamond segment (De Beers) contends with lab-grown alternatives and fluctuating luxury demand. Overall, Anglo American's mid-tier size among diversified miners means it must excel in operational execution to maintain competitiveness.

Major Competitors

• BHP Group Limited (BHP): BHP is the world's largest miner by market cap, with unparalleled scale in iron ore, copper, and coal. Its low-cost operations and balance sheet strength give it a significant advantage over Anglo American. However, BHP has less exposure to diamonds and PGMs, where Anglo holds unique positions. BHP's recent pivot toward 'future-facing' commodities (copper, nickel) aligns with global trends but increases overlap with Anglo's strategy.
• Rio Tinto plc (RIO): Rio Tinto rivals Anglo American in iron ore and copper but has exited coal and diamonds. Its industry-leading iron ore operations in Australia provide robust cash flows, but lack of diversification into PGMs or diamonds makes it more cyclical. Rio's stronger balance sheet allows for higher shareholder returns, but Anglo's broader commodity mix offers more upside if niche markets rebound.
• Freeport-McMoRan Inc. (FCX): Freeport is a pure-play copper giant with superior reserves and lower costs than Anglo's copper division. Its Grasberg mine is world-class, but lack of diversification leaves it vulnerable to copper price swings. Anglo's multi-commodity model provides more stability, though Freeport's expertise in copper could prove advantageous during the energy transition.
• Vale S.A. (VALE): Vale dominates the global iron ore market alongside Rio Tinto, with lower costs than Anglo. Its nickel operations compete with Anglo's, but Vale's weaker safety record and environmental liabilities pose reputational risks. Anglo's premium-quality iron ore (Kumba) and PGM assets differentiate it, though Vale's scale in iron ore is unmatched.
• Glencore plc (GLNCY): Glencore combines mining with a vast trading arm, giving it unique market insights but also higher complexity. Its coal-heavy portfolio faces transition risks, whereas Anglo is reducing coal exposure. Glencore's trading profits provide cushion during downturns, but Anglo's focus on owned assets offers more direct commodity upside. Both compete fiercely in copper and nickel.