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Glencore lifted by UBS upgrade to ‘buy’, with the Swiss bank expecting 2020 to be “a pivotal year”

UBS also raised its target price for Glencore to 270p from 250p, with the trading 0.6% higher at 238.50p

Mining truck

UBS gave a lift to blue-chip miner and commodities trader Glencore PLC (LON:GLEN) on Wednesday, upgrading its rating to ‘buy’ from ‘neutral’ as the Swiss bank expects 2020 to be “a pivotal year” for the group. 

In a note to clients, UBS also raised its target price for Glencore to 270p from 250p, with the trading 0.6% higher at 238.50p.

READ: Glencore dives after Serious Fraud Office begins bribery probe

The Swiss bank’s analysts noted that the blue-chip stock is down 34% since last July’s announcement that the US Department of Justice had issued it with a subpoena for documents and records on compliance with the US Foreign Corrupt Practices Act and money laundering statutes, underperforming the UK diversified miners by around 50%.

They said: “We see upside to GLEN's basket price with base metals to benefit from easing trade tensions and thermal coal to tighten with demand stable/supply contracting; the contract coal price in China and Oct annual price in Japan are encouraging.” 

The analysts added that they expect 2020 to be a pivotal year with senior management due to retire and it's African Copper business to improve.

They concluded: “We expect GLEN to keep its dividend flat  y/y in 2020 (~6% yield) & to step up returns in 2021 after lowering net debt by $2-3bn.”

Quick facts: Glencore PLC

Price: 208.45 GBX

LSE:GLEN
Market: LSE
Market Cap: £27.77 billion
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