Why the City is backing Glencore and AstraZeneca
A new deal has got investors excited about shares in this giant drugmaker, while one analyst names five reasons to be positive on Glencore. Graeme Evans has the details.
29th September 2026 12:57
by Graeme Evans from interactive investor
A “strategically smart” move by AstraZeneca (LSE:AZN) today gave a fresh boost to its shares as the City also digested the potential for Glencore to ramp up shareholder returns.
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Astra rose 216p to 12,708p after it unveiled a clinical collaboration and $2 billion (£1.5 billion) investment that will make it the second-largest shareholder of Nasdaq-listed Summit Therapeutics.
The tie-up will lead to the launch of trials in relation to gastrointestinal cancers involving Summit’s lead drug ivonescimab in combination with Astra's antibody drug conjugates.
The developments, which will see Astra take a 12% stake in Summit, should offset recent City jitters after late-stage drug trial setbacks and speculation linking the FTSE 100 company to $400 billion merger talks with Bristol-Myers Squibb.
The shares fell as far as 11,650p in early September but have since rallied by 9%, albeit still a long way from their February record high of more than 15,500p.
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Analysts at Jefferies described last night's agreement as strategically smart and said it should be well received by investors given that it provided development optionality without the risk of a larger acquisition.
The bank has a price target of 17,500p, representing an upside of 40%.
The Summit collaboration follows recent comments by chief executive Pascal Soriot that megadeals were not being pursued by Astra and that the company's strategy was still based on smaller business development transactions.
He has also said that Astra did not need M&A to meet his medium-term goal of $80 billion revenues, noting in July that the 2030 target “assumed successes and setbacks”.
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Astra was joined on the FTSE 100 risers board by Glencore (LSE:GLEN), which lifted 12.7p to 564.2p.
Cheaper valuations have made both stocks popular picks for interactive investor customers in recent days, with the mining company down 15% earlier this month amid a combination of macroeconomic, coal price and governance concerns.
The shares were given a boost on Friday, however, as UBS analysts said the risk/reward was now attractive as it moved to a Buy stance and lifted its target price to 650p.
The bank highlighted five reasons to be positive, including catalysts such as two major disposals and the potential for these to contribute to a step-up in cash returns in 2027.
Glencore’s current base cash distribution policy comprises a fixed $1 billion from marketing cash flows and a variable component equal to 25% of adjusted equity free cash flow generated by its industrial assets during the preceding year.
Based on a through-the-cycle net debt objective of around $10 billion, the board is also able to recommend additional top-up distributions.
UBS expects Glencore to announce a base distribution of $1.6 billion and top up of $2.5 billion at February's annual results before a further increase once disposal proceeds have been received.
The bank sees upside risk at Glencore's commodity trading arm, having recently posted its second best ever earnings performance.
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In addition, the key commodity prices within Glencore industrial business such as thermal and metallurgical coal, copper and zinc have performed well so far in 2026.
UBS also expects a gradual improvement on the visibility of Glencore's copper growth plans, which are regarded as key to a re-rating after the company last year set out its ambition to double output to 1.6 million tonnes by 2035.
It adds that a secondary listing on the Australian stock market, which is due on 14 October, has the potential to be supportive given the read across to the premium multiple of the exchange's other diversified stocks with meaningful copper exposure.
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