Glencore PLC (LSE:GLEN) received an upgrade from Goldman Sachs on Thursday, with the investment bank raising its recommendation to Buy from Neutral. The broker said the diversified miner is well placed to benefit from favourable market conditions in copper, zinc and metallurgical coal, even as it remains cautious on the outlook for iron ore.
Shares in Glencore climbed 3.5% to 507.80 pence in London trading, comfortably outperforming the FTSE 100, which gained around 0.7% during the session.
Although Goldman Sachs reduced its 12-month price target to £6.30 from £6.60, it said the recent weakness across the mining sector has created a more attractive valuation. The revised target continues to indicate significant upside from the current share price.
According to the broker, Glencore offers one of the strongest combinations of exposure to its preferred commodities, together with potential earnings upside from its marketing division and an attractive valuation compared with other diversified mining companies.
Goldman expects copper prices to remain well supported by tightening global mine supply and the possibility of U.S. import tariffs. It also believes zinc fundamentals remain favourable due to ongoing shortages of concentrate supply. In addition, the bank has become more optimistic about metallurgical coal following supply disruptions in China’s Shanxi province and expectations of seasonal restocking demand from India and China later this year.
The broker also highlighted additional upside potential from Glencore’s marketing business, pointing to elevated volatility in energy markets and ongoing dislocations across the physical copper and aluminium markets. Goldman added that potential asset sales—including infrastructure holdings, Glencore’s remaining stake in Bunge and selected mining investments—could provide additional capital for enhanced shareholder returns over the next 12 to 18 months.
Looking more broadly across the sector, Goldman Sachs reiterated its positive view on European mining companies with significant exposure to copper and aluminium. The bank maintained Buy ratings on Antofagasta, Norsk Hydro and Lundin Mining, while continuing to take a more cautious stance on iron ore, warning that weaker steel demand could push prices towards $90 to $95 per tonne.
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