J.P. Morgan's 2025 "Gold Rush" for Mining Stocks: Favors Teck Resources (TECK.US) and Alcoa (AA.US)
1min read Teck Resources (TECK.US), Alcoa (AA.US), Glencore, and Anglo American were named top picks for mining stocks this year by J.P. Morgan on Monday.
"Despite our recent caution on the near-term outlook for the sector due to cyclical factors, and believing the risk is skewed to the downside, we believe it is too late to downgrade our rating," said J.P. Morgan analyst Christopher La Femina.
"All things considered, after the recent sharp pullback, we are inclined to buy our preferred mining and steel producers," he added.
J.P. Morgan believes the "special factors" driving 2025 stock performance include Anglo American being in a breakup mode and potentially becoming an acquisition target in 2025; Glencore potentially increasing its capital returns and potentially moving to the U.S. - which would be beneficial for stock liquidity; and Teck Resources potentially becoming an acquisition target or an acquirer.
The bank also said it was bullish on Freeport-Mcmoran (FCX.US) and Lundin Mining due to their long-term investments in copper.
J.P. Morgan wrote: "Most importantly, 2025 will be a year of turmoil for the metals and mining industry. The question is: 'Does it matter for industry stock valuations or the interest of the average investor? We believe it will ultimately matter.'"
