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Investing.com -- J.P. Morgan has resumed coverage of Glencore (LON:GLEN) with an “overweight” rating and a £3.60 price target for December 2026, implying a potential 20% upside, in a note dated Tuesday.
The brokerage cited improving production, capital returns, and the company’s strategic flexibility as key drivers for its more positive outlook.
J.P. Morgan said Glencore has underperformed the MSCI Europe index by 45% since May 2024, largely due to weak operational results and a decline of more than 25% in coal prices.
However, the brokerage expects a strong recovery in the second half of 2025, driven primarily by a significant step-up in copper output.
Group earnings are forecast to rise approximately 150% in 2026 and 250% in 2027 compared to 2025 levels.
J.P. Morgan projects Glencore will return about 6% of its market capitalization to shareholders in 2025.
Additionally, if commodity prices rise 10%, the bank estimates excess capital of 7% by the end of 2026 and 20% by 2027.
While coal prices have weighed on Glencore’s share price, J.P. Morgan notes potential upside.
The brokerage points out that roughly 60% of global energy coal supply and 30% of steelmaking coal supply are currently operating at cash losses, suggesting price support or recovery may follow over a 12-month horizon.
J.P. Morgan also explores the impact of a hypothetical de-merger of Glencore’s coal assets.
The analysts suggest this move could act as a rerating catalyst, potentially lifting the company’s valuation by 15–20%, toward £3.50–3.70 per share.
The upgrade comes as a two-year restriction tied to Glencore’s merger of Viterra with Bunge (NYSE:BG) Global ends, allowing for a fresh reassessment.
According to J.P. Morgan, Glencore holds “value-accretive strategic optionality,” and its capital flexibility and asset mix support a more constructive investment case.