Update shared on27 Aug 2025
Fair value Decreased 8.17%A significant reduction in expected revenue growth and a sharp rise in the future P/E multiple have driven a slight downward revision in South32’s consensus analyst price target, now at A$3.27.
What's in the News
- South32 has signaled significant uncertainty over securing sufficient and affordable electricity for the Mozal Aluminium smelter beyond March 2026, triggering halted investment, pot relining stoppage, and contractor stand-downs; Mozal is likely to be placed on care and maintenance once the current agreement expires.
- The company will recognize a USD 372 million impairment for Mozal in fiscal 2025 results, reducing Mozal’s carrying value to USD 68 million.
- Fiscal year 2026 Mozal production is expected to fall to approximately 240kt (South32 share), reflecting a shorter operating period and reduced activity.
- In fiscal 2025, South32’s aluminium production increased 6% year-on-year, with Brazil Aluminium ramping up and Mozal operating near nameplate capacity after overcoming civil unrest disruptions in Mozambique.
- FY26 production guidance: ore processed 21.8Mt, copper 72.0kt, molybdenum 1.2kt, gold 18.0koz, and silver 600koz, all slightly down from FY25 actuals.
Valuation Changes
Summary of Valuation Changes for South32
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from A$3.32 to A$3.27.
- The Consensus Revenue Growth forecasts for South32 has significantly fallen from 4.9% per annum to 1.4% per annum.
- The Future P/E for South32 has significantly risen from 10.41x to 15.97x.
Disclaimer
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