GLENCORE PLC
DATE: 14 January 2026 TO: Investment Committee / Retail Desk FROM: Senior Equity Analyst SUBJECT: Investment Analysis â GLENCORE PLC (JSE: GLN)
Step 1: Data Gathering & Source Verification
Reporting Periods Used:
- Latest Interim Results: Half-Year Report for the six months ended 30 June 2025 (Released August 2025).
-
Latest Annual Financial Statements: Annual Report for the year ended 31 December 2024 (Released March 2025).
- Source File (PDF)
Recent SENS Activity (L12M):
- 09 Jan 2026: Statement regarding Rio Tinto (Strategic positioning/M&A speculation).
- 08 Jan 2026: Transaction in own shares (Ongoing buyback program).
- 05 Aug 2025: Interim Results & Dividend Declaration (Key financial data point).
- 28 May 2025: AGM Results (Shareholder approval of climate strategy).
Step 2: Metric Extraction
| Metric | Value | Notes | | --- | --- | --- | | Market Cap | ~R1.37 Trillion | One of the largest listings on the JSE by value. | | Share Price | R103.81 | Closing price as of 12 January 2026. | | Dividend Yield (L12M) | ~1.75% | Low. Based on a total distribution of US$0.10 (paid in two tranches of $0.05). Glencore has shifted focus from pure dividends to a "top-up" model including share buybacks (currently executing a ~$1bn buyback). | | Liquidity Check | High Pass | Average daily value traded is >R480m. This is a highly liquid, blue-chip stock with no execution risk for retail or institutional size. | | P/E Ratio | N/A (Negative) | Flagged. The company reported a net loss for the H1 2025 period (-$0.7bn). This is distorted by significant "significant items" (non-cash impairments) and cyclical lows in coal prices. Use EV/EBITDA for a cleaner valuation (currently trading ~4.0x - 5.0x EBITDA). | | Net Asset Value | N/A | Not applicable; valued on cash flow/earnings multiples. |
Step 3: Operational & Strategic Analysis
1. Business Overview Glencore is a globally diversified natural resource major that operates uniquely as both a miner (Industrial) and a trader (Marketing).
- Industrial: Mines copper, cobalt, zinc, nickel, and coal. They recently integrated the EVR steelmaking coal assets (acquired late 2024), solidifying their dominance in the energy sector despite ESG pressure.
- Marketing: A massive arbitrage arm that sources and sells commodities globally, acting as a cash-flow stabilizer when mine production faces headwinds.
2. Performance Trend (H1 2025 vs H1 2024)
- Trend: Contracting. The latest interims show a cyclical downturn.
- EBITDA: Adjusted EBITDA fell 14% to $5.4bn. This was driven primarily by normalizing (lower) coal prices and lower copper production volumes in the first half of the year.
- Margins: Industrial margins compressed to 26% (from 31% in H1 2024), reflecting the softer pricing environment for bulk commodities.
- Strategic Shift: The company completed the sale of Viterra (agri-business) in July 2025, receiving ~$900m cash, which strengthened the balance sheet (Net Debt/EBITDA is a healthy 1.08x).
3. Sector Context (Macro Factor) The Copper Supply Gap vs. The Coal Discount. The South African and global mining sector is currently bifurcated. "Future facing" metals (Copper/Cobalt) are in high demand for the energy transition, but supply constraints are keeping prices volatile. Conversely, Glencore is being penalized by the market for retaining its Coal assets (the "Coal Discount"). While coal generates massive cash flow, it alienates many ESG-focused institutional investors, suppressing the share price relative to peers like BHP or Rio Tinto who have exited fossil fuels.
Step 4: The Verdict
Bull Case (Buy Rationale): The Copper "Supercycle" Proxy Glencore is arguably the best-positioned major miner for the green energy transition. They are a top global producer of copper and cobalt. If you believe the consensus that the world faces a massive copper deficit by 2027/28 due to EV and grid expansion, Glencoreâs production profileâwhich is expected to recover materially in H2 2025 and 2026âwill drive significant re-rating.
Bear Case (Sell Rationale): The "Value Trap" Risk The company is complex and carries significant baggage. The refusal to spin off the coal business (finalized in mid-2024) means the stock may remain perpetually "cheap" (low multiple) because large ESG funds simply cannot own it. Furthermore, the reported net losses in H1 2025 indicate that when coal prices normalize, the rest of the portfolio must work much harder to generate profit.
Fair Value Estimate R115.00 â R125.00 Derived from a 5.5x EV/EBITDA multiple on normalized FY2026 earnings estimates.
Final Rating: SPECULATIVE BUY
- Why? The stock is currently trading near R103, offering decent upside to fair value. The low P/E (negative) is a backward-looking distortion. The forward-looking story (Copper recovery + Buybacks) is strong, but the ESG overhang and cyclical weakness make it higher risk than a pure "Hold."