Glencore (LON:GLEN) is ‘nearly ideally positioned’ for an ongoing bull market in mining, analysts at Jefferies have said. The comments came after the FTSE 100 group updated investors on its half-year performance yesterday, delivering a rise in earnings.
Glencore’s share price has fallen deep into the red in today’s session, having lost 3.24 percent to 320.70p as of 09:21 BST, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 1.01 percent lower at 7,315.38 points. The group’s shares have added more than 60 percent to their value over the past year, and are up by some 15 percent in the year-to-date.
Jefferies reiterated its ‘buy’ rating on Glencore yesterday, and lifted its price target on the shares from 380p to 400p.
“Management is focused on growth and potential opportunistic mergers and acquisitions, and the company has the balance sheet and free cash flow to pursue growth and increase dividends,” the broker’s analyst Christopher LaFemina commented, as quoted by Citywire. “The Glencore turnaround since late 2015 has been remarkable and is still underappreciated, in our view. Despite the very strong cyclical recovery in mining and the positive outlook, investor interest in the sector is still low, and mining shares are still under-owned.”
The comments came after the blue-chip miner announced yesterday that its adjusted EBITDA had jumped 68 percent in the first half of the year to $6.7 billion, having benefitted from a recovery in resource prices. Glencore further made progress in reducing its massive debt pile by $1.6 billion to $13.9 billion.
Macquarie also remains bullish on the FTSE 100 miner following the results, having reiterated its ‘outperform’ rating on the shares today, with a price target of 385p. According to MarketBeat, Glencore currently has a consensus ‘hold’ rating and an average price target of 341.87p.