A Look at South32 (ASX:S32) Valuation Following New Alaska Mineral Partnership and U.S. Department of War Investment

South32 (ASX:S32) shares are in focus after news that the company has entered into a partnership to develop mineral projects in Alaska. The partnership includes Trilogy Metals and Ambler Metals, with investment from the U.S. Department of War.

See our latest analysis for South32.

South32’s recent deal comes after a rebound in its share price, up nearly 11% over the past month following a challenging start to the year. Momentum appears to be shifting. However, with the total shareholder return still down more than 16% over the past year, investors are watching closely to see if this renewed interest can lead to a longer-term turnaround.

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With shares still trading at a sizeable discount to analyst estimates, but recent gains suggesting renewed optimism, does South32 remain undervalued, or has the market already priced in the potential from its latest partnership?

Most Popular Narrative: 5.6% Undervalued

With South32’s fair value pegged at A$3.11 per share versus a recent close at A$2.93, the market is lagging behind the narrative’s outlook. The gap raises questions: is there still upside in the current price, or has the story changed?

Large-scale investment and progress in copper and base metals growth projects (Hermosa, expanded Sierra Gorda capacity) position South32 to benefit from rising demand for metals critical in renewables, electric vehicles, and global decarbonization. This supports revenue and future earnings growth. Realized portfolio simplification and divestiture of lower margin, higher-risk coal assets refocus South32 on higher-return and future-facing commodities. This increases long-term net margins and improves the company's risk profile in line with energy transition trends.

Read the complete narrative.

Want to know what’s transforming South32’s profit potential? This narrative revolves around ambitious earnings targets, bold margin bets, and a profit multiple shaped by a unique metals mix. The fine print behind this fair value might surprise you: discover how these numbers stack up against sector heavyweights.

Result: Fair Value of $3.11 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing uncertainty around electricity supply for Mozal Aluminium and delays in expanding reserves at key mines could quickly change the growth outlook.

Find out about the key risks to this South32 narrative.

Build Your Own South32 Narrative

If you see the situation differently or want to dig into the details yourself, shaping your own South32 narrative is quick and straightforward. Do it your way

A great starting point for your South32 research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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