Goldman Sachs Downgrades Neutral from Buy, Raises PT to $81 from $80

Goldman Sachs Downgrades Neutral from Buy, Raises PT to $81 from $80

Goldman Sachs has downgraded Glencore (LON:GLEN) to Neutral from Buy, citing a challenging free cash flow (FCF) outlook and limited near-term upside. The Wall Street bank also raised its 12-month target price to £3.10 per share from £3.30 [1].

The downgrade comes after Glencore reported first-half (H1) 2025 EBITDA of $5.4 billion, broadly in line with the consensus estimate. However, attention shifted to weaker-than-expected free cash flow, with net debt rising to $14.5 billion—above Goldman’s $13.5 billion forecast and well above the Visible Alpha consensus of $12.4 billion [1].

Goldman analysts expect cash generation to remain under pressure in the second half, forecasting year-end net debt nearing $15 billion. The company reaffirmed its $1 billion structural cost-out plan, with half of the savings expected in the second half [1].

Goldman Sachs also cited ongoing coal market weakness and operational issues in copper as key headwinds. The company’s copper production is expected to fall about 15% this year versus 2023, despite copper prices rising 16% over the same period [1].

Since being added to Goldman’s Buy List in January, Glencore shares have fallen 36%, underperforming the Stoxx 600 index, which gained 14% [1].

References:
[1] https://www.investing.com/news/stock-market-news/goldman-sachs-cuts-glencore-to-neutral-on-challenging-outlook-lacking-catalysts-4176570