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South32 Ltd. (AU:S32)
ASX:S32
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South32 (S32) AI Stock Analysis

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AU:S32

South32

(Sydney:S32)

Rating:60Neutral
Price Target:
AU$3.00
▲(13.64% Upside)
South32's overall stock score reflects a stable financial position with strong revenue growth and efficient cost management. The positive earnings call highlights significant improvements in financial performance and production. However, technical indicators suggest bearish momentum, and valuation metrics indicate potential overvaluation. Profitability challenges and cash flow concerns also weigh on the score.
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 (S32) is a globally diversified mining and metals company headquartered in Perth, Western Australia. It operates in several countries, including Australia, South Africa, and South America, and focuses on producing commodities such as aluminum, coal, manganese, nickel, silver, lead, and zinc. The company is committed to sustainable development and aims to create value through responsible mining practices and efficient resource management.
How the Company Makes MoneySouth32 generates revenue primarily through the extraction and sale of various minerals and metals. The company's key revenue streams include the production and sale of commodities like aluminum, coal, and manganese. These products are sold to industrial customers worldwide for use in a wide range of applications, from construction and manufacturing to energy production and technology. South32's earnings are influenced by factors such as commodity prices, production volumes, and operational efficiencies. Additionally, the company may engage in strategic partnerships and joint ventures to optimize its resource extraction and distribution processes, further contributing to its revenue generation.

South32 Earnings Call Summary

Earnings Call Date:Aug 27, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial performance, increased production, and strategic environmental approvals, alongside ongoing challenges in safety, specific segment performance, and external risks. Overall, positive financial outcomes and strategic achievements were offset by significant operational and external challenges.
Q2-2025 Updates
Positive Updates
Increased Production and Environmental Approvals
Aluminum production increased by 5%, copper equivalent production increased by 21% at Sierra Gorda. Received primary state and federal environmental approvals for the Worsley mine development project.
Strong Financial Performance
44% increase in underlying EBITDA to $1 billion, increase in underlying earnings of $375 million, cash flow from operations improved by $361 million, and net debt reduction by $715 million to $47 million.
Capital Management and Dividends
Announced a fully franked interim ordinary dividend of $154 million at $0.034 per share and continuation of a capital management program with $171 million to be returned to shareholders.
Portfolio Streamlining and Growth
Sale of Illawarra Metallurgical Coal for up to $1.65 billion and investment in future production of critical minerals, including the Hermosa project in Arizona.
Negative Updates
Safety Incident
Tragic incident at Cerro Matoso resulting in the fatality of a colleague, José Luis Pérez.
Challenges at Mozal Aluminium
Updated production guidance due to ongoing civil unrest in Mozambique.
GEMCO Recovery and Weather Risks
Delayed mining activities and export sales due to the wet season and Cyclone Megan. Phased restart of mining activities with potential impacts from weather.
Brazil Aluminum EBITDA Loss
Ongoing EBITDA loss at Brazil Aluminum due to ramp-up challenges and not yet achieving full production.
Company Guidance
In the conference call, Graham Kerr provided comprehensive guidance for the first half of FY '25, emphasizing several key financial and operational metrics. The company reported a 44% increase in underlying EBITDA to $1 billion and a rise in underlying earnings by $375 million. Cash flow from operations improved by $361 million, despite a build-up in working capital. The firm reduced net debt by $715 million to $47 million, highlighting a strong balance sheet. Production metrics showed a 5% increase in aluminum production and a 21% increase in copper equivalent production at Sierra Gorda. The company maintained production guidance across its operations, except for Mozal Aluminium. Additionally, the Worsley mine development project received primary environmental approvals, expected to sustain production until at least FY '36. The company announced a fully franked interim dividend of $154 million at $0.034 per share and continued its capital management program with $171 million still to be returned to shareholders. Looking ahead, the company projected lower operating unit costs for most guided operations in the second half of FY '25, with a focus on cost performance and cash generation.

South32 Financial Statement Overview

Summary
South32 shows stable financial performance with strong revenue growth and efficient cost management. However, profitability challenges persist with low net profit margins and modest return on equity. The balance sheet is robust with low leverage, but cash flow concerns are evident due to declining free cash flow.
Income Statement
65
Positive
South32's income statement shows a mixed performance. The company achieved a revenue growth rate of 5.67% in the latest year, indicating a positive trend after previous declines. Gross profit margin improved to 43.62%, reflecting efficient cost management. However, the net profit margin remains low at 3.69%, suggesting challenges in converting revenue into profit. The EBIT and EBITDA margins are moderate at 14.29% and 23.13%, respectively, indicating stable operational efficiency.
Balance Sheet
70
Positive
The balance sheet of South32 is relatively strong, with a low debt-to-equity ratio of 0.18, indicating conservative leverage. The return on equity is modest at 2.41%, suggesting limited profitability relative to shareholder equity. The equity ratio stands at 64.44%, highlighting a solid capital structure with a significant portion of assets financed by equity.
Cash Flow
55
Neutral
Cash flow analysis reveals some concerns. The free cash flow growth rate is significantly negative, indicating a decline in cash available for discretionary use. The operating cash flow to net income ratio is healthy at 0.85, suggesting strong cash generation relative to net income. However, the free cash flow to net income ratio is low at 0.25, reflecting limited free cash flow relative to earnings.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue5.47B5.78B5.48B5.65B9.27B5.48B
Gross Profit2.22B2.52B1.86B1.94B5.46B2.57B
EBITDA429.00M1.34B141.00M416.00M4.47B1.47B
Net Income104.00M213.00M-203.00M-173.00M2.67B-195.00M
Balance Sheet
Total Assets13.86B13.73B14.24B14.56B16.34B13.24B
Cash, Cash Equivalents and Short-Term Investments1.60B1.68B842.00M1.26B2.37B1.61B
Total Debt1.65B1.63B1.57B1.74B1.83B1.21B
Total Liabilities4.68B4.87B5.27B5.19B5.56B4.29B
Stockholders Equity9.16B8.85B8.96B9.38B10.78B8.96B
Cash Flow
Free Cash Flow-46.00M332.00M-2.00M303.00M2.48B815.00M
Operating Cash Flow450.00M1.33B1.12B1.19B3.07B1.41B
Investing Cash Flow417.00M-20.00M-1.11B-908.00M-2.10B-608.00M
Financing Cash Flow-108.00M-405.00M-417.00M-1.39B-215.00M-501.00M

South32 Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.64
Price Trends
50DMA
2.95
Negative
100DMA
2.93
Negative
200DMA
3.17
Negative
Market Momentum
MACD
-0.09
Positive
RSI
33.64
Neutral
STOCH
7.00
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 2.64 is below the 20-day moving average (MA) of 2.85, below the 50-day MA of 2.95, and below the 200-day MA of 3.17, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 33.64 is Neutral, neither overbought nor oversold. The STOCH value of 7.00 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$10.28B6.210.76%2.84%3.10%-36.03%
60
Neutral
£11.95B29.553.64%3.78%6.53%
$4.85B22.94-5.63%
$9.31B1,678.570.34%
$2.37B1,408.33-35.65%5.94%
$4.68B7.94-26.55%4.54%
46
Neutral
AU$3.04B17.84-7.26%5.71%-2.30%-234.27%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:S32
South32
2.64
-0.24
-8.40%
PILBF
Pilbara Minerals
1.50
-0.13
-7.98%
LYSCF
Lynas Rare Earths
9.37
4.72
101.51%
IPGDF
IGO
3.24
-0.24
-6.90%
MALRF
Mineral Resources Limited
22.31
3.58
19.11%
AU:NIC
Nickel Mines Ltd.
0.72
-0.01
-1.37%

South32 Corporate Events

South32 Exceeds Production Guidance and Advances Strategic Projects
Jul 20, 2025

South32 reported strong operational performance in the June 2025 quarter, surpassing its FY25 production guidance with notable growth in copper and aluminium. The company completed significant transactions, including the sale of Illawarra Metallurgical Coal and the divestment of Cerro Matoso, aligning its portfolio with higher-returning businesses. South32’s Hermosa project saw substantial investment, advancing key milestones in the Taylor zinc-lead-silver project and exploration at the Clark manganese deposit. The company also returned US$350M to shareholders and continued to address operational challenges, such as securing electricity supply for Mozal Aluminium.

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 Faces Electricity Supply Challenges for Mozal Aluminium
Jul 13, 2025

South32 Limited is facing challenges in securing a new electricity supply agreement for its Mozal Aluminium smelter in Mozambique, with the current agreement expiring in March 2026. The uncertainty around future electricity supply, exacerbated by potential drought impacts on hydro-electric power generation, has led South32 to anticipate an impairment expense in its FY25 results and to review its FY26 production guidance for Mozal.

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 Due to Unmet Conditions
Jul 7, 2025

South32 Limited announced the cessation of 382,410 securities due to the lapse of conditional rights, as the conditions for these securities were not met by the deadline of June 30, 2025. This cessation of securities may impact the company’s capital structure and could influence investor perceptions, though the overall implications for stakeholders were not detailed in the announcement.

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 Issues Unquoted Securities to Boost Employee Incentives
Jul 7, 2025

South32 Limited has announced the issuance of 198,318 unquoted securities under an employee incentive scheme. This move reflects the company’s ongoing efforts to incentivize its workforce and align employee interests with company performance, potentially impacting its operational dynamics and stakeholder 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 to Divest Cerro Matoso in Strategic Nickel Market Shift
Jul 6, 2025

South32 Limited has announced a binding agreement to sell its Cerro Matoso nickel operation to CoreX Holding B.V., following a strategic review due to structural changes in the nickel market. This transaction aligns with South32’s strategy to streamline its portfolio towards higher-margin businesses in minerals and metals essential for energy transition, providing balance sheet flexibility for future investments in copper and zinc. The deal involves nominal consideration with future cash payments up to $100 million based on production and permitting milestones, and is expected to complete in late 2025, subject to conditions including international merger clearances.

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
Jul 1, 2025

South32 Limited has announced the cessation of 3,632,470 ordinary fully paid securities due to an on-market buy-back, effective June 30, 2025. This move is part of the company’s capital management strategy, potentially impacting its share value and market positioning, and reflects its ongoing efforts to optimize shareholder returns.

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 Change of Registered Office
Jul 1, 2025

South32 Limited has announced a change in its registered office and principal place of business to Level 2, 100 St Georges Terrace, Perth, WA 6000, effective from July 1, 2025. This administrative update, which includes the disconnection of its previously disclosed facsimile number, signifies a strategic move in the company’s operational logistics, potentially impacting its business operations and stakeholder communications.

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
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.

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: Sep 03, 2025