S32 – UBS rates the stock as Buy

South32 delivered an FY20 result that outpaced the consensus and was in line with UBS.

The on-market buyback is still suspended as the company manages its cash, the remaining US$121m postponed to September 21, when conditions will hopefully improve. Net cash at June 30 was US$298m ahead of consensus and the broker.

The miner is instead investing in the advancement of project milestones and awaiting the US$739m closure and rehab liability for South Africa Energy Coal, which UBS expects will give South32 a chance to revisit the balance sheet.

Target price rises to $2.80 from $2.60. Buy rating retained.

Sector: Materials.

Target price is $2.80.Current Price is $2.14. Difference: $0.66 – (brackets indicate current price is over target). If S32 meets the UBS target it will return approximately 24% (excluding dividends, fees and charges – negative figures indicate an expected loss).

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →