Analyst Note| Mathew Hodge, CFA |
In response to the disruption in markets and the significant sell-off in equity prices, we now see the Australian and major global mining stocks we cover as being generally undervalued. Based on the prices at close on March 17, our coverage is nearly 20% undervalued on average. This compares with our last sector update in January when we saw our coverage as being about 10% overvalued on average, based on share prices from Jan. 15. The coal and base metals-focused miners are generally most undervalued. We still see overvaluation among the iron ore-exposed miners, namely Fortescue and Rio Tinto, given the iron ore price remains elevated.