RE: GLEN9 Oct 2022 01:50
Glencore PLC (LSE:GLEN) is the only mining major worth buying currently, according to analysts at Liberum, which has sell recommendations on Rio Tinto and BHP PLC. The broker is bearish on the fundamentals in the mining sector with the war in Ukraine, rising US interest rates and the Chinese real estate crisis all putting pressure on prices. Liberum expects earnings across the sector to fall by 28% over the next year, driven primarily by weakness in copper, iron ore and coals. Copper and iron ore are the least favoured, with Rio having no positives in its story alongside Antofagasta, which has a tricky operational and political situation. Glencore is recommended because of its strategic win from running down its coal operations rather than a complete exit. As the US Department of Justice investigation winds down, Glencore pleaded guilty and will pay US$1.1bn in fines, new investors will emerge, Liberum believes. Buy with a price target of 685p is the broker's view.
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