Glencore (ASX: GLC) / Glencore PLC (GLEN LN)
Do you have any research on GLENCORE ?
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Answer
Hi There,
We covered new ASX-listing Glencore (GLC) in detail earlier in the month here and there’s not a great deal that has changed on the research front.
– Growing copper exposure: Glencore’s (GLC) ASX listing provides Australian investors with access to another global diversified miner, with copper expected to grow from around one-third of earnings in FY26 to more than half by the early 2030s. This increasingly copper-focused profile is similar to BHP’s direction, a trend MM likes.
– Attractive valuation: GLC trades on around 5x FY27–28 EV/EBITDA, well below its historical average of 7x and BHP/RIO at around 8x. With copper production increasing, returns on invested capital expected to exceed 20% and free cash flow yields approaching 8%, we see scope for this valuation discount to narrow.
– Resilient trading business: Unlike BHP and RIO, Glencore generates around 30% of earnings from its Marketing/Trading division, which has delivered 18 consecutive years of positive earnings, averaging more than US$3bn annually. MM believes this consistent earnings stream, combined with copper growth and a discounted valuation, makes GLC an attractive alternative to its larger Australian peers.
However, it is this trading business that contributes to the valuation discount with P&L impossible to foreacst.
We have shown the London chart below for Glencore as its dual listing on the ASX is in its infancy, in the short term we are neutral towards GLEN with a test £500, or ~10% below Wednesday nights close a strong possibility.
