Glencore: Positive Near-Term Catalysts Ahead

2025-04-03 05:39:07 ET

Summary

• Glencore's marketing division is well-positioned to take advantage of dislocations created by tariffs.
• There are several positive catalysts to watch out for, such as 1) dual listing, 2) ongoing buyback, and 3) the Viterra/Bunge merger.
• Despite solid results and good execution, GLNCY is discounted compared to its peers. Our buy is confirmed.

After our follow-up analysis of the mining industry with BHP Group (neutral-rated " Long-Standing Preference For Rio Tinto, Neutral Rating Confirmed "), Rio Tinto (buy-rated " Underappreciated Copper Growth "), and Anglo-American (buy-rated " Disposal Ongoing With More Value To Come "), we are back to comment on Glencore ( OTCPK:GLCNF ) ( OTCPK:GLNCY ) . Last time, we positively reported the Teck acquisition, and even if we were incorporating downside pressure on the company's valuation based on Glencore coal assets investment, the company's core EBITDA was backed by the Marketing division and copper. Having said that, Glencore's total return was negative (Fig 1), with an underperformance compared to the other diversified miners by approximately 15% over the last three months. This is mainly due to the weak coal (thermal & met) markets with spot free cash flow yield falling to low single digit number (8%). However, the risk-reward is attractive, and there are several potential positive near-term catalysts for Glencore shares to report....

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