"Our call is to buy shares of Anglo American for the company's leverage to a cyclical recovery in commodities, its organic growth in copper, its capital return, and its inexpensive valuation," Jefferies analyst Chris LaFemina said in a note on Sunday.
LaFemina said Anglo was well positioned to capitalise on rising commodity prices, which it said would be fuelled by "recent signs of life in Chinese demand, low inventories and major supply constraints".
"Anglo is operating well and increasing volumes and is therefore well positioned to benefit from commodity price upside."
"Management has done an excellent job transforming Anglo from a company with high operational risk, no free cash flow and a bad balance sheet to one of the highest quality companies in the sector," said the analyst.
Jefferies has posted a target price for Anglo of 2,600p, nearly 20% higher than Monday's price of 2,187p.
As well as Anglo, Jefferies pointed to energy players BP and E.On as other companies where "we think investor perception lags an improved reality".