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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The user Jamesiskindacool has a position in ASX:S32. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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