At A$4.167 per share, South32 (ASX: S32) appears reasonably valued based on its current operating performance. South32 reports in US dollars and recorded first-half FY26 underlying earnings of US$435 million, or approximately US 9.7 cents per share. Annualising this result and using an exchange rate of US$0.70 per Australian dollar gives earnings of approximately A$0.277 per share and a P/E ratio of around 15 times.
Underlying EBITDA increased by 9% to US$1.1 billion, while underlying earnings increased by 16%. The interim dividend of US 3.9 cents per share, together with the previous US 2.6-cent dividend, represents a trailing fully franked yield of approximately 2.2% at the assessed price.
This assessment is based mainly on South32’s current operations and does not fully account for the proposed sale of its aluminium assets to Alcoa, the development of the Hermosa project or future copper and zinc growth. These may change the company’s earnings and value over time, but remain subject to transaction approval, project costs, commodity prices and operating performance.
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