Is Glencore Still Attractively Priced After Its Recent Share Price Climb?

• If you are wondering whether Glencore is still good value after its recent run, or if most of the upside is already priced in, you are not alone. This article is here to unpack exactly that.
• The stock has climbed 5.6% over the last week, 6.4% over the past month and is up 4.9% year to date, even though the 3-year return is still down 19.3% after a strong 102.5% gain over 5 years.
• Those moves have come as investors refocus on Glencore's role in key transition metals and reshuffle expectations around commodity price cycles, capital returns and long-term supply security. At the same time, sentiment has been shifting as markets weigh regulatory and geopolitical headlines against the company’s strategic positioning across energy and metals markets.
• On Simply Wall St’s valuation framework, Glencore scores a 3 out of 6. This reflects a mix of attractive and less compelling signals that we will break down using several valuation approaches, before finishing with a more nuanced way to think about what the stock is really worth.

Find out why Glencore's 1.4% return over the last year is lagging behind its peers.

Approach 1: Glencore Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth today by projecting the cash it can generate in the future and discounting those cash flows back to a present value. For Glencore, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections in $.

Glencore generated roughly $986.6 Million in free cash flow over the last twelve months. Analysts provide detailed forecasts for the next few years, with free cash flow expected to grow into the mid single digit billions, for example, around $4.6 Billion by 2026. Beyond those analyst years, Simply Wall St extrapolates the trend, with projected free cash flow of about $4.9 Billion by 2029 and further out over the next decade.

When all those future cash flows are discounted back, the DCF model suggests an intrinsic value that is about 4.0% below the current share price. This implies the stock is slightly overvalued but not dramatically so.

Result: ABOUT RIGHT

Glencore is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Glencore.

Approach 2: Glencore Price vs Sales

For resource companies where earnings can swing with commodity cycles, the Price to Sales ratio is often a cleaner way to judge valuation, because revenue tends to be more stable than profits from year to year. In general, investors are willing to pay a higher multiple of sales for businesses with stronger growth prospects and lower perceived risk, and a lower multiple for slower growth or more volatile, cyclical companies.

Glencore currently trades on a Price to Sales ratio of about 0.26x, which is far below the Metals and Mining industry average of roughly 2.76x and also well under the peer group average of around 3.45x. Simply Wall St’s Fair Ratio framework, which estimates what a reasonable multiple should be after factoring in Glencore’s growth outlook, margins, industry, market cap and key risks, points to a Fair Ratio of about 1.01x. This can be more informative than a simple peer or industry comparison because it adjusts for company specific strengths and vulnerabilities rather than assuming all miners deserve the same multiple.

Comparing Glencore’s actual Price to Sales of 0.26x with the Fair Ratio of 1.01x suggests the market is pricing the stock at a meaningful discount to what these fundamentals imply.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1450 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Glencore Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company, translated into numbers like expected revenue, earnings, margins and a fair value estimate.

A Narrative connects what you believe about Glencore’s strategy, risks and opportunities to a financial forecast, and then to a Fair Value you can compare with today’s share price to decide whether it looks like a buy, hold or sell.

On Simply Wall St’s Community page, used by millions of investors, Narratives make this process accessible, guiding you to plug in your assumptions so the platform can instantly calculate Fair Value and keep it dynamically updated as new news, earnings or guidance emerge.

For example, one Glencore Narrative might assume strong copper growth, rising margins and a Fair Value near the upper analyst target of about £4.61. A more cautious Narrative could bake in slower demand, tighter margins and a Fair Value closer to the lower end around £3.09, giving you a clear, price based framework for acting on your own view.

Do you think there's more to the story for Glencore? Head over to our Community to see what others are saying!

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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