Glencore: What We Think of the Stock After Earnings

Key Morningstar Metrics for Glencore

• Fair Value Estimate
  : GBX 560
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : None
• Morningstar Uncertainty Rating
  : High

What We Thought of Glencore’s Earnings

Stronger commodity prices, led by copper, along with increased volatility and dislocations due to the Iran war, drove a very strong first half for Glencore GLEN but the war also increased energy and sulphur costs. Adjusted NPAT of USD 3.7 billion, or USD 31 cps, contrasts with USD 550 million a year ago.

Why it matters: The Iran war saw marketing EBIT rise 140% to USD 3.3 billion, near the top of the long-term guidance range of USD 2.3 billion-USD 3.5 billion. This is far above what we expected and the main reason the result is tracking above our previous full-year estimate.

• We raise our 2026 EPS and DPS estimates by 13% to reflect likely elevated marketing earnings in the second half too, as the Iran war drags on, though we expect lower volatility and fewer dislocations than in the first half.
• But the impact on our fair value estimate is broadly offset by 5% higher expected capital expenditure from 2026 through 2028 in line with updated guidance.

The bottom line: We maintain our fair value estimate of GBX 560 for no-moat Glencore. Shares closed the day 4% higher, helped by a stronger copper price, and trade around fair value.

Key stats: Unlike last year, Glencore will pay a “top-up” dividend of USD 8.5 cents per share in September, representing part of the value of the Bunge shareholding which it views as surplus capital, while also undertaking a small share buyback.

• With pro forma net debt at end-June 2026 around the USD 10 billion target and likely to fall on improved earnings compared with 2025, we forecast total 2026 DPS of USD 29 cps, up from USD 17 cps last year and a 3.8% forward yield.

Between the lines: It’s a good time to be a copper miner. Copper division EBITDA tripled from a year ago to USD 3 billion on higher prices and volumes along with lower unit cash costs. But we think the boom times are unlikely to last.

• The price of USD 6.40 per pound is near historical highs and materially above long-run cost support, which we estimate at around USD 3.80.