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Investing.com - JPMorgan has reiterated an Overweight rating on Glencore Plc (LON:GLEN) with a price target of GBP3.60, highlighting significant growth potential despite recent underperformance.
The mining giant has lagged the MSCI Europe by 45% since May 2024, primarily due to weak operating results and coal prices that have fallen more than 25%. Despite these challenges, JPMorgan expects Glencore’s group production to significantly increase in the second half of 2025, led by copper output.
The firm forecasts this production increase will translate to approximately 150% higher group earnings in 2026 and 250% higher earnings in 2027 compared to 2025 levels. Glencore is currently returning about 6% of its market capitalization in 2025, with JPMorgan estimating 7% excess capital by year-end 2026 and 20% by year-end 2027 if commodity prices increase by 10%.
JPMorgan also notes that approximately 60% of global energy coal supply is cash-loss making at current prices, while about 30% of steelmaking coal is similarly unprofitable, suggesting potential upside risk for coal prices over a 12-month horizon.
The investment bank explored a hypothetical coal de-merger scenario, estimating this could potentially trigger a 15-20% re-rating for Glencore shares to GBP3.50-3.70, and set a December 2026 price target of GBP3.60, representing approximately 20% upside potential.
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