Glencore (GLEN – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Ioannis Masvoulas from Morgan Stanley upgraded the rating on the stock to a Buy and gave it a p470.00 price target.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
Ioannis Masvoulas has given his Buy rating due to a combination of factors, including the belief that current market concerns regarding Glencore are overstated. The company’s shares have underperformed compared to their peers and commodities basket, mainly due to apprehensions about the impact of a potential end to the Ukraine war on earnings and coal exposure. However, the analyst considers these worries exaggerated and sees the current steep discount to the Sum-of-the-Parts valuation as an opportunity for significant upside.
Furthermore, while some investors are concerned about the decline in marketing profits in a post-war scenario with reduced commodity price volatility, Masvoulas argues that energy price volatility is increasing and tariff risks are creating new arbitrage opportunities. Glencore’s marketing business has demonstrated resilience in various cycles, and the analyst believes it can maintain its long-term EBIT range. Additionally, the analysis suggests that Glencore’s coal exposure is effectively “for free,” offering over 50% upside potential, leading to an upgrade to an Overweight rating and marking it as a top pick.
In another report released on February 14, RBC Capital also maintained a Buy rating on the stock with a p480.00 price target.