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South32 Ltd. (AU:S32)
ASX:S32

South32 (S32) AI Stock Analysis

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AU

South32

(Sydney:S32)

Rating:58Neutral
Price Target:
AU$3.00
▲(5.63%Upside)
South32 Ltd.'s overall stock score is influenced significantly by its earnings call, which reflects strong financial performance and strategic advancements despite operational challenges. However, the company's financial performance and high valuation metrics pose concerns, leading to a moderate overall score. The technical analysis presents a neutral outlook, which neither significantly aids nor detracts from the overall evaluation.
Positive Factors
Financial Position
South32 Ltd's strong financial position is highlighted as a key factor in its favorable stock rating.
Strategic Acquisition
South32 Ltd's strategic acquisition activities are seen as a growth opportunity.
Sustainability
An emphasis on sustainable practices is viewed positively, potentially enhancing South32 Ltd's long-term value.
Negative Factors
Market Volatility
Market volatility is considered a risk factor that could negatively affect South32 Ltd's stock performance.
Regulatory Challenges
There are concerns about regulatory challenges impacting South32 Ltd's operations, which could affect future performance.

South32 (S32) vs. iShares MSCI Australia ETF (EWA)

South32 Business Overview & Revenue Model

Company DescriptionSouth32 Limited operates as a diversified metals and mining company in Australia, Southern Africa, North America, and South America. The company operates through Worsley Alumina, Brazil Alumina, Brazil Aluminium, Hillside Aluminium, Mozal Aluminium, Sierra Gorda, Cannington, Hermosa, Cerro Matoso, Illawarra Metallurgical Coal, Australia Manganese, and South Africa Manganese segments. It has a portfolio of assets producing bauxite, alumina, aluminum, copper, silver, lead, zinc, nickel, metallurgical coal, manganese, ferronickel, and other base metals. South32 Limited also exports its products. The company was incorporated in 2000 and is headquartered in Perth, Australia.
How the Company Makes MoneySouth32 Ltd. generates revenue primarily through the extraction and sale of mineral resources. The company operates mines and smelters that produce a range of commodities, which are then sold to industrial customers globally. Key revenue streams include the sale of aluminum, coal, and manganese, which are used in a variety of applications such as construction, automotive, and steel production. Additionally, South32 benefits from strategic partnerships and joint ventures that enhance its operational capabilities and market reach. The company's earnings are influenced by commodity prices, production volumes, and operational efficiencies, as well as its ability to manage costs and optimize its supply chain.

South32 Earnings Call Summary

Earnings Call Date:Feb 12, 2025
(Q2-2025)
|
% Change Since: -15.90%|
Next Earnings Date:Aug 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with increased production, reduced debt, and a robust cash position. However, there were concerns regarding safety incidents, civil unrest impacts, and operational challenges at GEMCO. The strategic focus remains on safety improvements and operational efficiencies.
Q2-2025 Updates
Positive Updates
Increased Aluminum and Copper Production
Aluminum production increased by 5% and copper equivalent production increased by 21% at Sierra Gorda.
Significant Financial Performance Improvement
44% increase in underlying EBITDA to $1 billion and an increase in underlying earnings of $375 million.
Strong Cash Flow and Debt Reduction
Cash flow from operations improved by $361 million, and net debt was reduced by $715 million to $47 million.
Environmental Approvals and Project Progress
Received primary state and federal environmental approvals for the Worsley mine development project, which will sustain production to at least FY '36.
Dividend and Capital Management
Announced a fully franked interim ordinary dividend of $154 million and continuation of capital management program with $171 million remaining for shareholder returns.
Negative Updates
Safety Incident at Cerro Matoso
Tragically lost a colleague, José Luis Pérez, in a safety incident at Cerro Matoso, prompting an investigation and ongoing safety improvement actions.
Civil Unrest Impact at Mozal Aluminium
Updated production guidance for Mozal Aluminium due to the impacts of civil unrest in Mozambique.
Challenges in GEMCO Operations
Challenges from Cyclone Megan caused significant damage, impacting production timelines and requiring extensive rebuild efforts.
Company Guidance
During the call, several key metrics and guidance updates were provided. The company reported a 44% increase in underlying EBITDA, reaching $1 billion, alongside a $375 million rise in underlying earnings. Cash flow from operations improved by $361 million, even with increased working capital due to higher commodity prices and shipment timing. Net debt was reduced by $715 million to $47 million, reflecting a strong balance sheet focus. Production highlights included a 5% increase in aluminum output and a 21% hike in copper equivalent production at Sierra Gorda. The company maintained production guidance except for Mozal Aluminium due to civil unrest in Mozambique. The Worsley mine development project received environmental approvals, ensuring bauxite production until at least FY '36. The company announced a $154 million interim dividend and continued its capital management program with $171 million to return to shareholders. The sale of Illawarra Metallurgical Coal for up to $1.65 billion was noted as a significant portfolio streamlining move. The company also focused on growing critical minerals production, advancing the Tailor zinc-lead-silver project in Arizona, and exploring further high-grade copper opportunities at the Peake deposit.

South32 Financial Statement Overview

Summary
South32 Ltd. faces significant financial hurdles, with declining revenues and profitability as indicated by the income statement. The balance sheet suggests moderate financial stability with a reasonable debt-to-equity ratio but is impacted by declining equity and negative returns. The cash flow statement reflects challenges in cash generation, though operating cash flow remains substantial.
Income Statement
45
Neutral
The income statement highlights a troubling decline in financial performance. Gross profit margin has decreased, and net profit margin is negative, indicating losses. Revenue has fallen significantly from the previous year, and EBIT and EBITDA margins have worsened, reflecting operational inefficiencies.
Balance Sheet
60
Neutral
The balance sheet shows moderate financial stability with a reasonable debt-to-equity ratio. However, stockholders' equity has declined, and the return on equity is negative due to net losses. The equity ratio remains strong, indicating a solid asset base.
Cash Flow
50
Neutral
The cash flow statement reflects challenges in cash generation. Free cash flow has turned negative, and the operating cash flow to net income ratio indicates inefficiencies in translating revenue to cash. However, operating cash flow remains substantial, showcasing underlying cash-generating potential.
BreakdownTTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue3.19B5.48B5.65B9.27B5.48B5.01B
Gross Profit440.00M1.86B1.94B5.46B2.57B2.04B
EBITDA1.74B141.00M416.00M4.47B1.47B932.00M
Net Income360.00M-203.00M-173.00M2.67B-195.00M-65.00M
Balance Sheet
Total Assets13.86B14.24B14.56B16.34B13.24B13.74B
Cash, Cash Equivalents and Short-Term Investments1.60B842.00M1.26B2.37B1.61B1.31B
Total Debt1.65B1.57B1.74B1.83B1.21B1.02B
Total Liabilities4.68B5.27B5.19B5.56B4.29B4.17B
Stockholders Equity9.16B8.96B9.38B10.78B8.96B9.56B
Cash Flow
Free Cash Flow-46.00M-2.00M303.00M2.48B815.00M628.00M
Operating Cash Flow450.00M1.12B1.19B3.07B1.41B1.36B
Investing Cash Flow417.00M-1.11B-908.00M-2.10B-608.00M-873.00M
Financing Cash Flow-108.00M-417.00M-1.39B-215.00M-501.00M-562.00M

South32 Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.84
Price Trends
50DMA
2.91
Negative
100DMA
3.15
Negative
200DMA
3.31
Negative
Market Momentum
MACD
-0.03
Positive
RSI
40.08
Neutral
STOCH
16.83
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:S32, the sentiment is Negative. The current price of 2.84 is below the 20-day moving average (MA) of 2.98, below the 50-day MA of 2.91, and below the 200-day MA of 3.31, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 40.08 is Neutral, neither overbought nor oversold. The STOCH value of 16.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:S32.

South32 Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AUS32
58
Neutral
£12.77B58.17-3.53%3.70%-19.74%
44
Neutral
C$958.62M-6.68-13.31%2.80%17.55%-32.28%
$2.61B22.94-1.04%
$5.53B164.532.27%
$1.91B1,408.33-36.53%12.06%
$2.57B43.31-33.95%4.54%
AUNIC
62
Neutral
AU$3.06B17.84-7.32%4.20%-6.64%-209.78%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:S32
South32
2.90
-0.70
-19.44%
PILBF
Pilbara Minerals
0.80
-1.37
-63.13%
LYSCF
Lynas Rare Earths
6.04
2.10
53.30%
IPGDF
IGO
2.75
-1.13
-29.12%
MALRF
Mineral Resources Limited
13.60
-21.10
-60.81%
AU:NIC
Nickel Mines Ltd.
0.70
-0.07
-9.09%

South32 Corporate Events

South32 Limited Updates on Market Buy-Back Program
Jun 17, 2025

South32 Limited has announced an update regarding its ongoing on-market buy-back program, with a total of 328,428 ordinary fully paid securities bought back on the previous day, adding to a cumulative total of 24,574,159 securities repurchased. This buy-back initiative is part of the company’s strategy to optimize its capital structure and return value to shareholders, potentially enhancing its market position and shareholder confidence.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.90 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Limited Updates on Share Buy-Back Program
Jun 16, 2025

South32 Limited has announced an update on its ongoing share buy-back program, with a total of 24,134,802 securities bought back before the previous day and an additional 439,357 securities acquired on the previous day. This buy-back initiative is part of the company’s strategy to optimize its capital structure and deliver value to its shareholders, reflecting confidence in its financial position and future prospects.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.90 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Updates on Market Buy-Back Program
Jun 12, 2025

South32 Limited has announced an update regarding its ongoing on-market buy-back program. As of June 13, 2025, the company has bought back a total of 23,702,941 ordinary fully paid securities, with an additional 431,861 securities repurchased on the previous day. This buy-back initiative is part of South32’s strategy to optimize its capital structure and enhance shareholder value, reflecting the company’s commitment to efficient capital management.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.90 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Updates on Market Buy-Back Program
Jun 11, 2025

South32 Limited has announced an update on its ongoing on-market buy-back program, revealing that a total of 373,015 ordinary fully paid securities were bought back on the previous day, adding to the cumulative total of 23,329,926 securities repurchased since the program’s inception. This buy-back initiative is part of South32’s strategy to optimize its capital structure and enhance shareholder value, reflecting its strong financial position and commitment to returning capital to shareholders.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.90 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Limited Updates on Share Buy-Back Program
Jun 3, 2025

South32 Limited has announced an update regarding its ongoing on-market buy-back program. As of June 4, 2025, the company has repurchased a total of 22,946,016 of its ordinary fully paid shares, with 675,514 shares bought back on the previous day. This buy-back initiative is part of South32’s strategy to optimize its capital structure and return value to shareholders, reflecting confidence in its financial position and future prospects.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.90 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Announces Cessation of Securities Through Buy-Back
Jun 2, 2025

South32 Limited announced the cessation of 1,218,635 ordinary fully paid securities due to an on-market buy-back, effective May 31, 2025. This move is part of the company’s capital management strategy, potentially impacting its share value and market positioning by reducing the number of outstanding shares.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.90 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Director Acquires 40,000 Shares, Signaling Confidence
May 26, 2025

South32 Limited announced a change in the director’s interest, with Director Jane Nelson acquiring 40,000 ordinary shares of the company through an on-market purchase on the Australian Securities Exchange. This transaction reflects a direct interest in the company, with the shares valued at $121,260.61, potentially indicating confidence in the company’s future performance.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.90 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Limited Updates on Market Buy-Back Program
May 21, 2025

South32 Limited has announced an update on its ongoing on-market buy-back program, with a total of 21,166,169 securities bought back before the previous day and an additional 492,325 securities bought back on the previous day. This buy-back initiative is part of the company’s strategy to manage its capital structure and return value to shareholders, potentially impacting its market positioning and shareholder relations.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.90 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Updates on Ongoing Buy-Back Program
May 19, 2025

South32 Limited has announced an update regarding its ongoing on-market buy-back program. As of the latest notification, the company has repurchased a total of 20,772,342 securities prior to the previous day, with an additional 393,827 securities bought back on the previous day. This buy-back initiative is part of South32’s strategy to optimize its capital structure and enhance shareholder value.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.90 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Marks Decade with Strategic Shift Towards Energy Transition Metals
May 13, 2025

South32 Limited announced a strategic update as it approaches its 10-year anniversary, emphasizing its shift towards metals and minerals vital for the global energy transition. This repositioning is expected to enhance South32’s market position and potentially impact stakeholders by aligning with the growing demand for sustainable energy solutions.

The most recent analyst rating on (AU:S32) stock is a Hold with a A$1.65 price target. To see the full list of analyst forecasts on South32 stock, see the AU:S32 Stock Forecast page.

South32 Announces Leadership Transition with New CEO Appointment
May 12, 2025

South32 has announced a leadership transition with Matthew Daley set to become the new CEO in 2026, succeeding Graham Kerr. Daley, who brings extensive experience from Anglo American and Glencore, will join as Deputy CEO in February 2026. This transition follows a comprehensive global search and is expected to continue South32’s strategic transformation towards a focus on minerals and metals critical to the energy transition. The company is well-positioned for future growth with a strong balance sheet and an attractive commodity mix.

South32 Limited Announces Cessation of Securities via Buy-Back
May 1, 2025

South32 Limited announced the cessation of 4,246,267 ordinary fully paid securities due to an on-market buy-back, effective April 30, 2025. This move is part of the company’s capital management strategy, potentially impacting its share value and market perception positively by reducing the number of shares outstanding.

South32 Ltd. Updates on Market Buy-Back Program
Apr 16, 2025

South32 Ltd. has announced an update on its ongoing on-market buy-back program, detailing the acquisition of 419,064 ordinary fully paid securities on the previous day, bringing the total number of securities bought back to 20,353,278. This buy-back initiative is part of the company’s strategy to manage its capital structure and return value to shareholders, potentially impacting its share price and market perception.

South32 Reports Strong Quarter with Strategic Advancements and Production Increases
Apr 16, 2025

South32 reported a strong quarter with a net cash increase of US$299M, driven by improved operating performance and strategic projects. The company saw significant production increases in copper and aluminium, while advancing key projects like the Worsley Mine Development and Hermosa’s Taylor zinc-lead-silver project. Despite challenges such as civil unrest in Mozambique and weather disruptions in Queensland, South32 maintained its production guidance for most operations, except for a 10% reduction at Cannington. The company also highlighted its focus on safety improvements and cost management, positioning itself to navigate potential global market uncertainties.

South32 Ltd. Updates on Share Buy-Back Progress
Apr 15, 2025

South32 Ltd. has announced an update regarding its ongoing share buy-back program. As of April 16, 2025, the company has repurchased a total of 19,955,341 shares, with an additional 397,937 shares bought back on the previous day. This buy-back initiative is part of South32’s strategy to optimize its capital structure and return value to shareholders, potentially enhancing its market position and shareholder confidence.

South32 Ltd. Updates on Market Buy-Back Program
Apr 13, 2025

South32 Ltd. has announced an update regarding its ongoing on-market buy-back program, which involves the repurchase of its ordinary fully paid securities. As of the latest update, the company has bought back a total of 19,282,530 securities, with an additional 672,811 securities repurchased on the previous day. This buy-back initiative is part of South32’s strategy to manage its capital structure and return value to shareholders, potentially impacting the company’s stock performance and market perception.

South32 Ltd. Updates on Market Buy-Back Program
Apr 8, 2025

South32 Ltd. has announced an update regarding its ongoing on-market buy-back program, where a total of 860,579 ordinary fully paid securities were bought back on the previous day, adding to the cumulative total of 18,421,951 securities repurchased. This buy-back initiative is part of the company’s strategy to manage its capital structure and return value to shareholders, reflecting its robust financial position and commitment to enhancing shareholder returns.

South32 Ltd. Announces Cessation of Securities Following Buy-Back
Apr 1, 2025

South32 Ltd. announced the cessation of 3,947,781 ordinary fully paid securities due to an on-market buy-back, effective March 31, 2025. This move reflects the company’s ongoing capital management strategy, potentially impacting its share value and signaling confidence in its financial stability, which may influence investor perception and market positioning.

South32 Ltd. Updates on Market Buy-Back Program
Mar 31, 2025

South32 Ltd. has announced an update regarding its ongoing on-market buy-back program, with a total of 16,994,347 securities bought back before the previous day and an additional 702,276 securities acquired on the previous day. This buy-back initiative is part of the company’s strategy to manage its capital structure and potentially enhance shareholder value, reflecting its commitment to maintaining financial flexibility and optimizing its balance sheet.

South32 Ltd. Updates on Market Buy-Back Program
Mar 30, 2025

South32 Ltd. has announced an update regarding its ongoing on-market buy-back program, with a total of 16,526,075 securities bought back before the previous day and an additional 468,272 securities acquired on the previous day. This buy-back initiative reflects the company’s strategy to optimize its capital structure and potentially enhance shareholder value by reducing the number of outstanding shares.

South32 Ltd. Updates on Market Buy-Back Program
Mar 26, 2025

South32 Ltd. has announced an update on its ongoing on-market buy-back program, which involves the repurchase of its ordinary fully paid securities. As of the latest update, the company has bought back a total of 16,526,075 securities, with 348,166 purchased on the previous day. This buy-back initiative is part of South32’s strategy to manage its capital structure and deliver value to its shareholders, potentially impacting its stock liquidity and market perception.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 19, 2025