UPDATE: J.P. Morgan Upgrades Compania de Minas Buenaventura SAA to Overweight, Lowers PT on Valuation

In a report published Monday, J.P. Morgan analyst John Bridges upgraded the rating on Compania de Minas Buenaventura SAA BVN from Neutral to Overweight, but lowered the price target from $22.00 to $19.00. In the report, J.P. Morgan noted, “We feel the primary reason for the underperformance of BVN relative to the precious metals sector in 2013 has been lower interest in emerging market investments, uncertainty with the outlook for Yanacocha (44% owned) and problems at its self managed mines. We believe the operational problems at Buenaventura's own mines are short term and that there are new chapters to the Yanacocha story. We feel that one or more of the development options at Yanacocha will be more attractive for the regional government compared with mine closure, which would significantly impact the local economy around Cajamarca. We expect Orcopampa to return to higher grade ores early in 2014 and savings from closing smaller underperforming mines. Even using conservative base metal multiples, we feel BVN offers value and we are upgrading our rating from N to OW with a price target of $19 by 2014 year end.” Compania de Minas Buenaventura SAA closed on Friday at $11.76.