Glencore (GLEN-L) received a “strong buy” rating from eight analysts, while 11 analysts rated it as a “buy” or some equivalent. The remaining five analysts polled by Thomson Reuters on August 21 rated Glencore as a “hold.” The stock hasn’t received any “sell” ratings.
Glencore carries a mean consensus target price of 422.77 pence, which implies a potential upside of 27.8% over its closing price on August 21. In contrast, Glencore carried a one-year target price of 431.47 pence on August 7—one day before its earnings release.
On August 9, CFRA lowered Glencore’s target price from 410 pence to 390 pence. J.P. Morgan also lowered Glencore’s target price from 550 pence to 520 pence. On August 17, Liberum raised Glencore to a “hold.”
Glencore produced ~351,000 metric tons of copper in the second quarter, which takes its copper production to ~696,000 metric tons in the first half of 2018. The company’s copper production rose 8% year-over-year in the first half of 2018. Glencore’s higher production could be attributed to increased production at its Katanga mine. Glencore curtailed the operations in 2015 due to falling copper prices. Freeport-McMoRan (FCX) also curtailed its copper production in 2015.
Although Glencore’s earnings in the first half of 2018 fell short of the expectations, they were a record for the company. Glencore has been out of favor with the markets this year. Based on the closing prices on August 21, Glencore has fallen 27.1% this year. Antofagasta (ANTO) has seen a negative price action of 18.4% during this period, while Anglo American (AAL-L) is trading flat for the year.
Along with falling commodity prices, a subpoena from the Department of Justice and exposure to the Congo triggered a backlash from mining companies operating in the country. The Congo revised its mining code this year.
Next, we’ll discuss how analysts rate Southern Copper (SCCO).