The stock of the ASX-listed South32 Limited (AU:S32) received two Buy ratings from analysts in the last week, signaling the possibility of further appreciation in its share price. The positive outlook from analysts provided a welcome surprise for investors after the company faced a challenging fiscal year in 2023. Overall, the stock carries a Moderate Buy rating from analysts.
So far this year, the South32 share price has seen a decline of 12.6%. The stock reached its peak in March 2023 but began a downward trajectory after the company revised its full-year production guidance downward by 8%.
South32 is a mining company focused on a diversified portfolio of metals. The company has operations in Australia, Southern Africa, and South America.
Recent Ratings
Analysts like the company, considering its extensive and diversified portfolio, many of which metals are currently experiencing robust price strength. Moreover, the company’s attractive dividends also make the investment case stronger. The company declared a total dividend of $0.81 per share, which is expected to grow to $0.165 per share in FY24.
Four days ago, analysts at Ord Minnett upgraded their rating on the stock from Hold to Buy. The price target of AU$4.10 implies an upside of 23% in the shares. The brokerage firm also expects a substantial increase in dividend payouts from the company. Based on the current share price of the company, Ord Minnett expects a roughly 6% dividend yield in FY 2024, followed by an approximately 8% yield in FY 2025.
Also, analyst Rahul Anand from Morgan Stanley confirmed his Buy rating on the stock, suggesting a growth of 24.2%.
Moving ahead in FY24, the company anticipates a planned increase in production volumes in most of its operations, coupled with cost control measures. This is expected to partially mitigate the continued inflationary pressures affecting the industry.
What is the Forecast for South32?
Based on a total of 12 recommendations, South32 stock has received a Moderate Buy rating on TipRanks. It is based on Six Buy, five Hold, and one Sell recommendations. The South32 share price target is AU$3.84, which represents a favourable change of 14.8% in the share price.
