Goldman Sachs has upgraded Glencore PLC (LSE: GLEN) to Buy from Neutral, arguing the diversified miner is well positioned to benefit from strengthening commodity markets.
The investment bank pointed to favourable conditions across copper, zinc and metallurgical coal as key drivers behind its more positive stance on the stock.
Glencore shares climbed 3.5% to 507.80 pence in London trading on Thursday, comfortably outperforming the broader FTSE 100, which gained around 0.7% during the session.
Goldman Sachs reduced its 12-month price target to £6.30 from £6.60, but said recent weakness across the mining sector had created a more attractive entry point for investors.
Despite the lower target, the revised figure still implies significant upside from the current share price, reinforcing the bank’s conviction that the stock offers good value at current levels.
The broker said Glencore offers one of the strongest combinations of exposure to its preferred commodities, alongside potential earnings upside from its marketing division and an attractive valuation relative to other diversified mining companies.
Goldman expects copper prices to remain well supported by tightening global mine supply and the possibility of US import tariffs driving further demand for the metal.
The bank also said zinc fundamentals remain favourable due to ongoing shortages of concentrate supply, while its view on metallurgical coal has turned more optimistic following supply disruptions in China’s Shanxi province.
Goldman added that expectations of seasonal restocking demand from India and China later this year provide further support to the metallurgical coal outlook.
The broker highlighted additional upside potential from Glencore’s marketing business, pointing to elevated volatility in energy markets and ongoing dislocations across the physical copper and aluminium markets.
Goldman also noted that potential asset sales, including infrastructure holdings, Glencore’s remaining stake in Bunge and selected mining investments, could provide additional capital for enhanced shareholder returns over the next 12 to 18 months.
Looking more broadly at the sector, Goldman Sachs reiterated its positive view on European mining companies with significant exposure to copper and aluminium.
The bank maintained Buy ratings on Antofagasta, Norsk Hydro and Lundin Mining as part of its preferred positions within the European mining space.
Goldman continued to take a more cautious stance on iron ore, warning that weaker steel demand could push prices towards $90 to $95 per tonne in the period ahead.