South32 shares climb as Q2 result impresses analysts
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The news: South32 shares extended gains in morning trade after the diversified miner posted higher production for most of its commodities in the second quarter.
The numbers: South32 shares were up 1.14% to $3.55 by 12:16pm AEDT, having climbed around 3.6% earlier in the session.
Among analysts:
- UBS remained 'buy' rated with an unchanged $4 price target;
- Morgans kept its 'add' rating and lifted its price target from $4.10 to $4.20;
- Morgan Stanley maintained its 'overweight' rating and $3.90 price target; and
- Citi stayed unchanged with a 'neutral' rating and $3.90 price target.
The context: Analysts were broadly encouraged by South32's Q2 result, with almost all guidance unchanged and aluminium and copper production outstripping consensus estimates.
What they said: "We see South32 as offering an attractive basket of mostly base metal exposures, sensitive to an eventual recovery in China/global growth," Morgans analysts said.
"It also offers diversified exposure to alumina and aluminium, both currently enjoying a health upcycle that could extend beyond consensus estimates."
The sources: UBS research, Morgans research, Morgan Stanley research, Citi research
