RBC hails cash flow potential at Glencore, keeps at 'outperform'

RBC Capital Markets has reiterated its 'outperform' rating on Glencore following the mining and commodities giant's annual results last month, saying its cash generation potential remains "solid".

"Glencore's 2023 results acted as a clearing event and removed guidance risks from the investment case," the broker said.

Shares fell sharply on the release of the results on 21 February, which showed that full-year adjusted EBITDA dropped to $17.10bn in 2023 from $34.06bn in 2022. However, since reaching a 52-week low of 365.31p on 26 February, the stock has jumped 14%.

RBC highlighted Glencore's double-digit free cash flow generation potential, with cash generated by operating activities of $15.1bn in 2023, "which coupled with its copper exposure and thermal coal bottoming out will likely assist in outperformance".

The broker added: "Our target price edges down from 520p to 500p as we tighten the numbers, and we reiterate our 'outperform' recommendation."

Glencore's shares were up nearly 1% at 420.95p by 0908 GMT.