Analysts at Berenberg upgraded mining giant Glencore Plc from 'hold' to 'buy' on Wednesday following the group's capital markets day in December.
For the full year, Berenberg expects Glencore to deliver 860,000 tonnes of copper, 951,000 tonnes of zinc, 71,000 tonnes of nickel, 41,000 tonnes of cobalt, 94m tonnes of energy coal and 33m tonnes of steelmaking coal.
"We are not expecting a great deal from Glencore in terms of its dividends for 2026 - rising commodity prices are likely to provide a working capital headwind and we expect net debt of USD $11.7bn at the end of December, above the USD $10bn cap," said Berenberg. "Thus, we expect only a base distribution of USD $0.09 per share."
However, Berenberg noted that Glencore could elect to use the remaining $600m of proceeds from the sale of its stake in Viterra to supplement dividends or buy back more stock.
Berenberg updated its model for its new price deck and the updated capital markets day guidance, with copper becoming "a more dominant part" of its equity story, coupled with M&A upside risk, the German bank lifted its enterprise value/underlying earnings multiple to 6x and its price target from 350p to 480p.
The German bank added that Glencore shares were currently trading on 0.89x net asset value and 3.7x 2026E underlying earnings.
Reporting by Iain Gilbert at Sharecast.com