The $35 billion acquisition of Teck Resources has initiated a reevaluation of valuations, with Anglo American (AAUKF.US) receiving a outperform rating from Scotiabank.

Scotiabank has included Anglo American PLC (AAUKF.US) in its research coverage for the first time, assigning it an "Outperform" rating and setting a target price of 52 per share. The institution believes that following the approximately $35 billion acquisition of Teck Resources, the company's focus on its copper businessparticularly the attractive and lower-risk medium-term growth prospectswill likely lead to a significant revaluation of its stock. Analyst Orest Fomenko at Scotiabank indicated that the combined entity "Anglo American" possesses a portfolio of large-scale, long-life Tier 1 mining assets in the Americas, which could potentially make it an attractive acquisition target among global diversified mining giants. The analyst anticipates that at the end of 2026, the formal net debt of the merged company will stand at $11.6 billion (equivalent to $6.71 per share), decreasing to $7 billion (equivalent to $4.02 per share) by the end of 2027, resulting in a net debt to EBITDA ratio of only 0.5 times at that time. Fomenko predicts that despite the need to fund significant growth in the copper business in the future, the company will still achieve robust free cash flows of $4.4 billion and $4.5 billion in 2027 and 2028, respectivelyyielding free cash flow yield rates of 4.6% and 4.6%, compared to the industry averages of only 3.7% and 4.2%. This will likely support the generous future shareholder return plan, which is yet to be finalized, following the completion of the transaction.