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(Sharecast News) - JPMorgan Cazenove resumed coverage of Glencore on Tuesday with an 'overweight' rating and 360p price target following a two-year period of restriction relating to Viterra's merger with Bunge Global.
The bank said "optionality" is a central theme for its positive outlook on the miner.
It noted that Glencore has lagged the MSCI Europe by 45% since May 2024 due to weak operating results and more than 25% lower coal prices.
JPM said group production will significantly step up in H2'25 led by copper, which it forecasts will translate into around 150% higher group earnings in 2026, 250% higher in 2027 versus 2025.
"GLEN is returning circa 6% of its market cap in 2025 and we estimate circa 7%/20% excess capital by YE'26/27 if commodity prices increase 10%," the bank said.
"On a more than 12 month horizon, spot coal prices may carry upside risk since about 60% of global energy coal supply is cash loss making at current prices, circa 30% for steelmaking coal," it said.
JPM said Glencore possesses "value-accretive strategic optionality". The bank said it had explored equity and credit considerations relating to a hypothetical Coal de-merger and estimates this could be a comfortable catalyst for a circa 15-20% re-rating for Glencore to 350p to 370p a share.
At 1310 BST, the shares were up 2.8% at 306.10p.
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