NDA Risks Around Major Investment Projects Will Likely Cap Share Price Upside

Narrative Update on Aurubis

The analyst price target for Aurubis has been raised from EUR 60 to EUR 78. This reflects analysts' expectations for stronger revenue growth, improved profit margins, and a more attractive future valuation multiple.

Analyst Commentary

Recent Street research reflects a more nuanced stance on Aurubis, with higher headline price targets balanced by increasing attention to execution and cycle risks. While the latest target increases imply upside from current levels, the prevailing rating suggests limited conviction that the shares can sustainably outperform.

Bearish analysts highlight that, despite supportive fundamentals in metals demand and recycling, the share price already discounts a substantial portion of the anticipated margin recovery and capacity utilization improvements. As a result, they are hesitant to upgrade their overall stance even as they adjust targets upward.

Bearish Takeaways

• Bearish analysts view the current valuation as embedding optimistic assumptions on mid cycle margins, leaving limited buffer if metal spreads or treatment charges normalize more quickly than expected.
• Execution risk around ongoing investment projects and capacity expansions is seen as a key constraint on multiple re rating, with concern that delays or cost overruns could erode the projected earnings uplift.
• There is caution that earnings growth remains sensitive to commodity price volatility and macro driven demand swings, which could undermine the consistency of returns that current targets imply.
• Some bearish analysts argue that capital intensity and working capital needs may cap free cash flow generation, limiting room for more aggressive shareholder returns and, in turn, restraining upside to the valuation.

What's in the News

• Aurubis plans to raise its dividend to €1.60 per share for fiscal year 2024/25, implying a higher payout ratio of roughly 27% versus 20% previously, subject to approval at the February 12, 2026 AGM (company announcement).
• Gruvaktiebolaget Viscaria signed an MoU with Aurubis to negotiate a long term copper offtake agreement covering about 50% of Viscaria’s projected output from 2028 to 2035, with an option to extend and adjust volumes as production grows (company announcement).
• Aurubis has started ramping up its new Aurubis Richmond secondary smelter in Georgia, USA, which will process up to 180,000 tons of complex recycling materials annually to supply strategic metals such as copper and support more resilient American supply chains (company announcement).
• The company completed a major modernization of the shaft furnace at its Avellino site in Italy, targeting nearly 20% higher copper wire rod capacity, improved energy efficiency, and a lower CO2 footprint, with a second upgrade phase planned for August 2026 (company announcement).

Valuation Changes

• Fair Value: Increased significantly from €60.0 to €78.0. This implies a higher assessed upside potential for the shares.
• Discount Rate: Risen slightly from 5.49% to 6.16%. This reflects a modestly higher required return or perceived risk profile.
• Revenue Growth: Edged up from 3.32% to 3.67%. This indicates marginally stronger expectations for top line expansion.
• Net Profit Margin: Improved markedly from 1.11% to 1.75%. This signals a more optimistic view on future profitability.
• Future P/E: Fallen meaningfully from 13.7x to 11.3x. This suggests a more conservative valuation multiple despite higher earnings expectations.