Glencore PLC  

Glencore PLC (LSE: GLEN) is an FTSE 100 index-listed diversified natural resource entity. The key operations are in central Europe, Russia, North America, and South Africa. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Rationale – Sell at GBX 458.30

• Resistance near Current levels: GLEN’s stock price crossed the Resistance (R1) stated in the previous report on 07 February 2024, and might witness some sell-off from the current levels. Considering the market conditions and the price action, it is prudent to exit the stock, as the prices might pull back from these levels.
• Sluggish Profitability Margins: In FY23, the Gross margin of GLEN was 5.0% against the industry median of 25.0% and the EBITDA margin declined to 6.4% in the reported period (FY23) as compared to the industry median of 13.9% in Q4 FY22. Also, the Net Margin slipped to 1.5% in FY23 versus 4.5% of the industry median.
• Expensive Valuation: The stock of GLEN is currently offered at 6.8x on Price/ Cash flow-based relative valuation (NTM) as compared to the industry (Basic Materials) median of 6.1x. On Price/ book value-based relative valuation (NTM), the stock is valued at 1.6x which is higher than the industry median of 1.2x.

Share Price Chart  

Conclusion

Based on the notional gains, macroeconomic challenges, and price action stance, a "SELL" recommendation on Glencore PLC (LSE: GLEN) has been given at the closing market price of GBX 458.30 (as of 03 April 2024).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 03 April 2024.  The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.