Morningstar - South32 Ltd. (S32) Short-Term Benefit from Higher Commodity Prices for South32, Now Well Above Marginal Costs

Report

Morningstar

Mathew Hodge

EUR 101.80 For Business Accounts Only

Short-Term Benefit from Higher Commodity Prices for South32, Now Well Above Marginal Costs

We raise our fair value estimate for no-moat South32 to AUD 2.05 from AUD 1.85 per share. Half of the increase reflects the recent decline in the AUD/USD exchange rate to 0.75. The other half of the upgrade relates to higher near-term commodity prices due to the tailwinds from greater demand and supply restraints in China, particularly for manganese, alumina, and metallurgical coal. Our adjusted earnings forecasts for fiscal 2018 and 2019 are now USD 0.21 and USD 0.14 per share, respectively, ve...

11/12/2017 13 EN

Underlying

South32 Ltd.

South32 is engaged in mining and metal production from a portfolio of assets for the commodities of alumina, aluminium, bauxite, energy and metallurgical coal, manganese ore, manganese alloy, nickel, silver, lead and zinc. As of June 30 2016, Co. operated 10 segments, which were comprised of: Worsley Alumina, South Africa Aluminium, Brazil Alumina, Mozal Aluminium, South Africa Energy Coal, Illawarra Metallurgical Coal, Australia Manganese, South Africa Manganese, Cerro Matoso, and Cannington.

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AU000000S320 Australian Securities Exchange Australia

Provider

Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

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Analysts

Mathew Hodge

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Short-Term Benefit from Higher Commodity Prices for South32, Now Well Above Marginal Costs

South32 Ltd: 1 director

Manganese Supply Deficit Looms as Demand from Alloys and EV Batteries Increases

SOUTH32 with less fundamental stars is reduced to Neutral

Business as Usual for No-Moat Lonza; Specialty Ingredients Carve-Out on Track for 2020

Sasol Provides Full-Year Production Update

Sasol Provides Full-Year Production Update

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