European Metals & Mining: Framing value: When does 「cheaper」 become 「cheap enough」? Charts

BofA Securities frames current value across its European Metals & Mining coverage using two go-to approaches: Price/NPV (DCF), more typically used with diversified miners, and EV/EBITDA, more typically used with metals companies. Some coverage stocks have corrected quite materially from highs earlier this year: Rio Tinto -27% since its June peak, Antofagasta -29% since its February peak, ArcelorMittal -20% from its September peak and Norsk Hydro -45% from its June peak. As an indication of relative value versus historic trading history, the report highlights levels where key valuation metrics would be 1 standard deviation below average, with EV/EBITDA multiples on 2027E or spot calculated using 2027E volumes. Bottom line: while value is emerging, the team would not yet pitch its stocks as close-your-eyes-and-buy deep-deep value situations; this is not COVID and not the 2015 China hard-landing scare. Copper fundamentals look quite good and the team remains constructive on the space, see