South32 Limited (SOUHY)
OTHER OTC:SOUHY
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South32
(OTC:SOUHY)
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Rating:66Neutral
Price Target:
$15.00
▲(17.55% Upside)
Action:ReiteratedDate:02/17/26
The score is driven primarily by mixed financial performance (stable balance sheet but weak margins and declining free cash flow). Technicals add support with a clear uptrend and healthy momentum. The main offset is valuation risk from a high P/E and only modest dividend yield, while the earnings call was constructive but tempered by Mozal and project execution uncertainties.
Positive Factors
Balance Sheet Strength
A low debt-to-equity ratio and minimal net debt provide durable financial flexibility across commodity cycles. This conservative leverage supports capital management, sustains dividend capacity and funds project spending without forcing asset sales or dilutive equity when markets weaken.
Negative Factors
Weak Profitability & Cash Conversion
Low net margins and poor conversion of earnings into free cash flow limit the company's ability to self-fund growth and sustain returns. Persistent weak FCF metrics increase reliance on commodity tailwinds or external financing to meet capex, dividends and project commitments over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
A low debt-to-equity ratio and minimal net debt provide durable financial flexibility across commodity cycles. This conservative leverage supports capital management, sustains dividend capacity and funds project spending without forcing asset sales or dilutive equity when markets weaken.
Read all positive factors
South32 (SOUHY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.39B
Dividend Yield2.48%
Average Volume (3M)8.54K
Price to Earnings (P/E)6.0
Beta (1Y)1.28
Revenue Growth4.84%
EPS GrowthN/A
CountryUS
Employees9,906
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.48
Shares Outstanding897,297,100
10 Day Avg. Volume0
30 Day Avg. Volume8,536
Financial Highlights & Ratios
PEG Ratio-0.18
Price to Book (P/B)0.97
Price to Sales (P/S)1.49
P/FCF Ratio25.86
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue2.64
Enterprise Value/Gross Profit5.85
Enterprise Value/Ebitda17.28
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.01
Revenue Forecast (FY)$6.75B
South32 Business Overview & Revenue Model
Company Description
South32 Limited operates as a diversified metals and mining company in Australia, Southern Africa, North America, and South America. The company operates through Worsley Alumina, Hillside Aluminium, Mozal Aluminium, Brazil Alumina, Illawarra Metal...
How the Company Makes Money
South32 makes money primarily by extracting, processing, and selling commodities and metal products to customers at market-linked prices. Its key revenue streams come from: (1) Alumina and aluminum: revenue from producing alumina (a refinery produ...
South32 Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 20, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial position: strong H1 financial results (USD 1.1bn underlying EBITDA, 28.2% margin), a very low net debt position (USD 25m), maintained production guidance, active growth project progress (Taylor, Hermosa, Sierra Gorda, Ambler) and meaningful shareholder returns (USD 175m dividend + capital program increase). However, material near-term negatives — notably the Mozal power-driven care-and-maintenance decision, operational instability at Brazil aluminium, and execution/approval uncertainties on key projects (Sierra Gorda fourth grinding line and some Hermosa shaft issues) — temper the outlook. On balance, the positive financial performance, strong balance sheet and clear project momentum outweigh the operational challenges and asset-specific setbacks.Positive Updates
Strong Financial Results
Underlying EBITDA of USD 1.1 billion, group operating margin of 28.2%, and growth in underlying earnings of USD 435 million. Net debt of USD 25 million at period end, indicating a strong balance sheet and cash position.
Negative Updates
Mozal Power Shortage and Care & Maintenance
Mozal aluminium smelter faces prolonged power constraints from Cahora Bassa (drought-related). Management is planning care and maintenance due to lack of viable power supply; ongoing care & maintenance cost estimated at ~USD 5 million per year (100% basis) and closure/rehab estimate of ~USD 119 million. The shutdown has significant social/economic impacts (4,000–5,000 direct jobs, ~20,000 total impacted and ~3.9% of Mozambique's GDP).
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Financial Results
Underlying EBITDA of USD 1.1 billion, group operating margin of 28.2%, and growth in underlying earnings of USD 435 million. Net debt of USD 25 million at period end, indicating a strong balance sheet and cash position.
Read all positive updates
Company Guidance
The company reiterated that FY‑26 production unit guidance is unchanged across operated assets and flagged upside from commodity price tailwinds and a planned drawdown of Mozal inventories expected to boost H2 cash generation; H1 results included underlying EBITDA of USD 1.1 billion, group operating margin 28.2%, underlying earnings growth of USD 435 million and net debt of USD 25 million, and the board announced a fully‑franked H1 dividend of USD 175 million plus a USD 100 million increase to the USD 2.6 billion capital management program (USD 209 million remaining to return). Major project and capital guidance: Taylor/Hermosa spend to date ~USD 1 billion (~48% of scheduled budget), bench shaft 56% complete (459/824 m) and main shaft 41% (370/898 m), with a project milestone and capex assessment due H2 FY‑26 and federal records of decision for Taylor/Clark/Peake expected in H1 FY‑27; Sierra Gorda’s fourth grinding line feasibility is nearing completion with an independent review and potential joint FID mid‑calendar 2026 and a Catabela Northeast exploration target of ~1.1–2.9 billion tonnes, plus ~110 million tonnes of oxide stockpile (~0.38% Cu) being evaluated; Cannington saw a cited 28% ore reserve uplift (noted as moving from 3 Mt to 13 Mt) increasing ~2 years of life, an underground resource of ~45 Mt, and planned capital of ~USD 65–80 million over FY27–28 for ventilation/shaft works; Mozal is being placed into care and maintenance with ongoing care cost ~USD 5 million p.a. and closure/rehab ~USD 119 million, current pot run‑rate ~565 of 710 pots (~80% capacity) and plant power demand ~940 MW, while Alcoa’s revised restart guidance cited ~135,000 t in FY‑26 and ~140,000 t in FY‑27 versus ~179,000 t capacity.South32 Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
70
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.41B | 5.78B | 5.48B | 5.65B | 9.27B | 5.48B |
| Gross Profit | 2.44B | 2.52B | 2.53B | 2.56B | 3.82B | 1.01B |
| EBITDA | 826.07M | 1.34B | 141.00M | 416.00M | 4.47B | 769.00M |
| Net Income | 296.72M | 213.00M | -203.00M | -173.00M | 2.67B | -195.00M |
Balance Sheet | ||||||
| Total Assets | 13.80B | 13.73B | 14.24B | 14.56B | 16.34B | 13.24B |
| Cash, Cash Equivalents and Short-Term Investments | 1.66B | 1.68B | 842.00M | 1.26B | 2.37B | 1.61B |
| Total Debt | 1.69B | 1.63B | 1.57B | 1.74B | 1.83B | 1.21B |
| Total Liabilities | 4.54B | 4.87B | 5.27B | 5.19B | 5.56B | 4.29B |
| Stockholders Equity | 9.24B | 8.85B | 8.96B | 9.38B | 10.78B | 8.96B |
Cash Flow | ||||||
| Free Cash Flow | 388.16M | 332.00M | -2.00M | 303.00M | 2.48B | 815.00M |
| Operating Cash Flow | 1.43B | 1.33B | 1.12B | 1.19B | 3.07B | 1.41B |
| Investing Cash Flow | -892.17M | -20.00M | -1.11B | -908.00M | -2.10B | -608.00M |
| Financing Cash Flow | -475.87M | -405.00M | -417.00M | -1.39B | -215.00M | -501.00M |
South32 Technical Analysis
Positive
12.76
Price Trends
15.37
Positive
13.50
Positive
11.44
Positive
Market Momentum
0.03
Negative
58.01
Neutral
90.99
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOUHY, the sentiment is Positive. The current price of 12.76 is below the 20-day moving average (MA) of 14.77, below the 50-day MA of 15.37, and above the 200-day MA of 11.44, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 58.01 is Neutral, neither overbought nor oversold. The STOCH value of 90.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOUHY.
South32 Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $194.94B | 6.78 | 21.41% | 3.55% | -7.86% | 14.17% | |
69 Neutral | $168.59B | 13.01 | 16.59% | 4.60% | -0.44% | -4.20% | |
68 Neutral | $71.64B | 22.50 | 6.34% | 10.04% | -8.49% | -41.69% | |
67 Neutral | $3.37B | 34.48 | 8.14% | 0.43% | 3.93% | -73.94% | |
66 Neutral | $14.39B | 5.98 | 3.36% | 2.48% | 4.84% | ― | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
48 Neutral | $9.67B | -100.09 | -5.04% | ― | 26.44% | -95.87% |
* Basic Materials Sector Average
SOUHY
South32
16.13
8.76
118.91%
BHP
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76.96
34.39
80.77%
MTRN
Materion
162.09
83.71
106.79%
RIO
Rio Tinto
98.45
45.62
86.35%
VALE
Vale SA
16.74
8.52
103.75%
MP
MP Materials
54.44
30.63
128.64%
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.