South32 Undergoing Significant Transformation, Says Bull

Dow Jones
2 hours ago

0104 GMT - RBC's positive view on South32 is reaffirmed by a business update and strategy presentation that highlights the miner's rising exposure to base metals, planned production growth and simplified operating model. "Historically some perceived S32 as overly complicated with too many commodities and assets in different countries," says RBC. The stock was weighed by relatively short mine lives and low margins, as well as significant rehabilitation needs and high emissions intensity. "We believe the recently agreed aluminum transaction and S32's increasing earnings contribution from base metals driven by Hermosa, Sierra Gorda and Cannington life extension significantly transforms S32 and warrants a higher valuation multiple," RBC says. The broker reiterates its outperform rating and A$5.50/share price target on South32. The stock is up 1.2% at A$4.92.

 

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