Anglo American's third-quarter production update disappointed on copper, prompting Berenberg to adjust its financial forecasts for the miner. The bank, however, maintained its Hold rating and 43-pound price target, signaling that the stock's fate is tied more to the pending merger with Teck Resources than to quarterly output figures.
Copper miss and mixed results
In a note published Wednesday, Berenberg reported that Anglo American produced 175,000 tonnes of copper in the third quarter, falling short of both the bank's estimate of 193,000 tonnes and the market consensus of 185,000 tonnes. The shortfall was attributed to winter weather in Chile and lower ore grades at the Quellaveco mine in Peru.
Other segments performed more steadily. Iron ore and steelmaking coal output were broadly in line with expectations, while manganese, nickel, and diamonds came in ahead of what Berenberg had anticipated. This mixed scorecard led the bank to reshuffle its model, cutting earnings-per-share forecasts for 2026 and 2028, slightly lifting 2027, and adjusting sales and operating-profit assumptions across the period.
Despite the copper miss, Berenberg kept its Hold rating and 43-pound price target, suggesting that the near-term production weakness does not fundamentally change the investment case.
The Teck merger and the China hurdle
The bigger point from Berenberg is about what will actually move Anglo American's stock. The bank expects shares to trade roughly in line with the broader market until the merger with Canada's Teck Resources, a major mining company, completes. Berenberg still sees the deal closing by March 2027, with Chinese antitrust approval flagged as the last major hurdle.
This regulatory approval is critical because it would clear the way for the merger, which is expected to reshape Anglo American's portfolio and potentially unlock value for shareholders. Until then, the stock's performance is likely to be driven more by headlines about the approval process than by quarterly production numbers.
What it means for investors
When a broker keeps its price target and says a stock should track the wider market until a deal closes, it's treating the shares less like a pure earnings story and more like a probability-weighted event. In this case, Anglo American's valuation is anchored to what the company could look like if the Teck tie-up completes, adjusted for the chance and timing of the key remaining gatekeeper – Chinese antitrust regulators.
That setup can mute the market's reaction to quarterly noise, even a miss as visible as 175,000 tonnes of copper versus 193,000 expected, because it mostly shifts near-term profits rather than changing the big decision tree. The closer the regulatory call gets, the more day-to-day price moves can be driven by headlines about the approval process, not production updates.
For everyday investors, this means that Anglo American's stock may not react strongly to quarterly earnings surprises in the near term. Instead, the focus should be on the progress of the Teck merger and any news from Chinese regulators. As with any merger, there is uncertainty, and the outcome is not guaranteed. Investors should weigh the potential benefits of the deal against the risks of delays or regulatory rejection.
Berenberg's decision to keep its target price unchanged suggests that the copper miss does not alter the long-term thesis, but it does highlight the importance of the merger timeline. For those holding Anglo American shares, patience may be required as the regulatory process unfolds.
In the broader context, copper prices have been volatile, with recent copper market dynamics showing mixed signals. While LME stockpiles have rebuilt, premiums suggest tight supply, which could support prices in the long run. Anglo American's copper operations are a key part of its portfolio, and any sustained weakness in output could weigh on future earnings.
Other miners have also faced challenges. For instance, RBC recently cut its Glencore target as copper output heads to the low end of guidance, reflecting broader industry headwinds. Similarly, AIC Mines posted record cash flow despite lower copper output, showing that operational efficiency can offset volume declines.
As Anglo American navigates its merger and production challenges, investors will be watching for any updates on the Chinese antitrust review and the company's ability to stabilize copper output. The next few quarters will be crucial in determining whether the stock can move beyond its current trading range.
