Macquarie Raises South32 Price Target, Reaffirms ‘Outperform’ Rating

Fri 14 Mar 25, 12:01 AM | Team Kalkine

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Highlights:

Macquarie lifts South32 price target by 2% to AU$4.50, maintains “outperform” rating.

Long-term copper and zinc price upgrades offset alumina price cuts.

Potential asset sales and power supply renegotiations could further strengthen the company’s outlook.

Macquarie analysts have raised their price target for Australian diversified miner South32 (ASX:S32) by 2%, from AU$4.41 to AU$4.50, while maintaining an “outperform” rating. The brokerage reiterated its preference for South32 among Australian miners, highlighting the company’s advantage of not being exposed to the volatile iron ore market.

The price target hike comes as Macquarie adjusted its outlook, with long-term copper and zinc price upgrades balancing out recent cuts to aluminium and alumina prices. The firm noted that while lower alumina prices impacted South32’s earnings, foreign exchange benefits — particularly from a weaker South African rand — helped cushion cost pressures.

Strategic Developments and De-risking Initiatives

Macquarie highlighted that South32’s renegotiation of power supply for its Mozal aluminium business could de-risk the asset and improve its longevity. Additionally, a potential sale of the Cerro Matoso nickel mine could free up cash and reduce closure liabilities, strengthening South32’s balance sheet.

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This article has been prepared by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine. Any information/advice provided in this article is general in nature and does not take into account your objectives, financial situation or needs. You should therefore consider whether the information is appropriate to your objectives, financial situation and needs before acting upon it. There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine articles. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product. Please note past performance is neither an indicator nor a guarantee of future performance. You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice/information in this article or on the Kalkine website. Not all investments are appropriate for all people. The information in this article and on Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its articles, newsletters and websites. All information represents our views at the date of publication and may change without notice. Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this article, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law. Please also read our Terms & Conditions and Financial Services Guide for further information. On the date of publishing this article (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures. Some of the images/music that may be used in the article are copyright to their respective owner(s). Kalkine does not claim ownership of any of the pictures displayed/music used in the article unless stated otherwise. The images/music that may be used in the article are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary. Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.

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