Credit Suisse lifts the rating for South32 to Outperform from Neutral and raises the target price to $3.60 from $3. It’s anticipated the global aluminium market will head into protracted deficits from 2022. Its also felt being ESG-compliant is a big plus for the company.
The broker believes aluminium should be in high demand for its role in electricity transmission, solar projects and light-weight. Credit Suisse forecasts the aluminium price to climb to US$1.20/lb next year.
The analyst expects a free cashflow contribution from the company’s aluminium division of 44% in 2022, or 62% if the alumina
refineries are included.
Target price is $3.60.Current Price is $2.91. Difference: $0.69 – (brackets indicate current price is over target). If S32 meets the Credit Suisse target it will return approximately 19% (excluding dividends, fees and charges – negative figures indicate an expected loss).