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Quarter-End Insights

Basic Materials: Still Overvalued Despite Protective Tariffs

Our bearish view on the mining and metals sector means the basic materials coverage universe trades at a market-cap-weighted 30% premium to our fair value estimates.

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  • On a market-capitalization-weighted basis, our basic materials coverage trades at a 30% premium to our estimate of intrinsic value, remaining the most overvalued sector. This is primarily driven by our bearish perspectives on most mining and metals companies.
  • Miners we cover remain substantially overvalued, reflecting our expectation for a structural change in demand growth from China as its economy matures and transitions toward less commodity-intensive and more consumption-driven growth.

Charles Gross does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.