Berenberg lowers target price on Glencore
By Iain Gilbert
Date: Thursday 01 May 2025
(Sharecast News) - Analysts at Berenberg lowered their target price on mining giant Glencore from 400.0p to 380.0p on Thursday after the firm's 2025 started "on a soft note".
Berenberg updated its model on Glencore following the company's Q125 operating update on 30 April, which was seen as a miss by both the analysts and the wider market.
"Operationally, a mixture of weaker grades, mine sequencing and some weather impacts at key assets resulted in production volumes coming in lighter than our expectations, particularly in copper and zinc," said Berenberg.
The German bank, which has a 'buy' rating on the stock, noted that guidance across the group was maintained, with the exception of a cut in thermal coal guidance to 87-95m tonnes from 92-100m tonnes.
Berenberg said "perhaps more disappointing" was the fact that Glencore's marketing business was tracking to the mid-point of its $2.2bn-3.2bn underlying earnings guidance range. Berenebrg said this would appear to mean that marketing was "not performing as well as the market was hoping" amid such global volatility.
"We update our model for the quarter, and move to the lower ends of the guidance range for copper and zinc. This reduces EPS by 6%. We then make negative adjustments to our marketing margins to bring EBIT in line with guidance; this takes our total EPS reduction for 2025 to -19%," said Glencore.
"The share price reaction likely reflects the market's concern about further risks to volume guidance and weaker marketing performance. The shares are trading on 0.65x NAV and 2.7x 2025E EBITDA; in our view, Glencore needs a decent Q2 (we have been given implied Q2 volumes via the H1/H2 volume split), coupled with stronger thermal coal prices and/or some self-help levers being pulled to drive a re-rating."
Reporting by Iain Gilbert at Sharecast.com
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