S32 – Morgans rates the stock as Add

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South32 has announced interruptions to its South African operations after the government called a 21-day lock-down.

Morgans retains a positive view on the stock, supported by a healthy cash balance and a share price trading at a -21% discount to even a depressed spot valuation.

The broker recommends caution for risk-averse investors, given the sensitivity to changing metal prices. Add maintained. Target is reduced to $2.71 from $3.20.

Sector: Materials.

Target price is $2.71.Current Price is $1.88. Difference: $0.83 – (brackets indicate current price is over target). If S32 meets the Morgans target it will return approximately 31% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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