RE: News10 Feb 2023 15:31
It is time to stop buying Glencore PLC (LSE:GLEN), that’s according to analysts at UBS, who today downgraded the miner and commodities trader to ‘neutral’.
Despite its stock being up 50% since the beginning of 2022 and outperforming its competitors by 20%, analysts at UBS point to a weaker near-term outlook for thermal coal and cobalt prices which the Swiss bank’s team reckons lead to a more balanced risk-vs-reward profile.
Nevertheless, the bank added that Glencore is still deemed to be “preferred” compared its peers due to its ‘favourable’ commodity mix and near-term cashflows.
Glencore is set to release its full year financial results next week, on 15 February, and UBS is predicting it will pledge some US$7.5bn of cash returns to shareholders comprising US$5bn of dividends and US$2.5bn of share buy-backs.
Operationally, the bank reckons Glencore may lower cost guidance for copper and adjust for coal.