Our target price for ANTM of Rp3,000/share is based on 12x mid-FY26E PER set at its three-year mean. We believe a target multiple in line with historical average is apt with ANTM's ability to deliver volume growth (through its Ni ore business) and the global boom in EV-battery demand balanced by its execution track-record. We use a 3-year mean as our base to account for the changing dynamics in ANTM's business (e.g., nickel ore export ban, recent LME movement, and margin improvement in gold trading business). Our key assumptions include US$15,250/t and US$16,000/t LME nickel price forecast in 2025E/2026E while utilizing US$3,100/oz and US$2,750/oz for our gold price assumption in 2025E/2026E.

This stock is High Risk based upon Citi’s quantitative model but assigning a High Risk rating is not supported by other qualitative factors such as improvement in company's financials and margin, particularly from gold trading business, and has one of the lowest cash costs ferronickel operations compared to other smelters, according to Wood Mackenzie and so a High Risk rating has not been applied.

The company is exposed to macroeconomic developments affecting the nickel price, input cost price (e.g., oil and coal), and exchange rates, as well as operational risks that could affect production volume in addition to regulatory risks in regards to its mining concession area. 

Upside risks include an increase in LME nickel and gold prices, potential investments in other smelters/projects, higher-than-expected production and sales volumes, lower-than-expected input costs, and any positive news flow on the Indonesia Battery Corporation (IBC). Downside risks include any execution risks causing several projects to be delayed, worse-than-expected operational performance, government intervention, lower-than-expected benchmark nickel and gold prices, and further impairment on its projects.

If the impact from any of these factors proves to be less/more negative than we anticipate, the stock could outperform/underperform our target price.