Anglo American Platinum: With A Leaner Cost Base, Waiting For An Uptick In Commodity Prices

2025-03-28 10:57:56 ET

Summary

• Facing low commodity prices and elevated inflation in South Africa, the firm has successfully implemented an extensive cost-cutting program.
• The firm will spin-off from its parent company, Anglo American, by June 2025. In the meantime, it will pay a healthy dividend tapping from its net cash balance sheet.
• Despite positive developments, the stock valuation is demanding. Any upside has to be tied to higher PGM prices, which seems unlikely, given the weak macro environment.
• I change my rating from BUY to HOLD.

My thesis

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