Goldman Sachs equity analysts believe that the market currently undervalues the long-term growth potential of Glencore’s copper business. Despite Glencore’s stock being down 4.5% this month on the JSE, where it has a secondary listing, Goldman Sachs maintains a positive outlook, emphasizing Glencore’s status as one of the JSE’s largest stocks with a valuation close to R1.3-trillion.
According to Goldman Sachs, Glencore offers one of the most cost-effective organic growth opportunities in copper. The investment bank predicts significant contributions to growth from Glencore’s lower-cost copper assets and development pipeline. They project an increase in copper expenditure to $3.1bn-$3.7bn annually between 2026 and 2028, potentially boosting production by 20% to 1.2-million tonnes by 2028.
Goldman Sachs forecasts Glencore’s market capitalisation to rise in the next 12 months, with an implied valuation of $94bn. This projection is based on an expected share price increase to 550p on the London Stock Exchange.
Commodity Focus and Future Prospects
Glencore’s involvement in copper and cobalt mining, crucial for the green energy transition, positions it favorably in the market. Goldman Sachs highlights a potential structural supply deficit in copper from 2025, reinforcing the firm’s bullish stance on the metal.
Glencore’s recent acquisition of the Elk Valley Resources metallurgical coal business and plans to spin off its coal assets reflect its active involvement in strategic deals. Over the past eight years, Glencore has executed over 50 transactions, balancing asset sales and acquisitions. Goldman Sachs anticipates Glencore to continue its dynamic approach to mergers & acquisitions, leveraging its strong balance sheet and cash-generative units.
While bullish on Glencore, Goldman Sachs has adopted a neutral stance on Anglo American, another major player in the mining industry.