Why Glencore shares are tipped to rally over 50%
After sliding to multi-month lows, one City expert believes the mining giant can reclaim prior highs and more. Graeme Evans explains the rationale.
1st July 2026 12:30
by Graeme Evans from interactive investor
Photo: Sheldon Cooper/SOPA Images/LightRocket via Getty Images.
The path to a significant re-rating of Glencore (LSE:GLEN) shares has been outlined after a City bank said the mining giant presented a “compelling and increasingly unique” investment case.
Berenberg’s support includes an unchanged target price of 780p, representing potential upside of 52% after Glencore shares fell 16% from their record close of 610p seen in early June.
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The bank’s case is built around the differentiated nature of Glencore, which makes it more of a “bridge” stock for the new commodity era compared to other diversified miners.
It said the company is well placed to capitalise on the supportive yet volatile macroeconomic conditions, with its legacy energy assets in coal and oil and its commodity trading arm able to generate robust cash flows at a time of heightened concerns about energy security.
Berenberg noted this week: “In our view, this powerful cash generation underpins Glencore’s commitment to ongoing shareholder returns.
“Simultaneously, it funds the construction of the company’s ‘off-ramp’ to a high-growth future, with copper at the centre of this vision.”
Glencore’s ultimate ambition is to double copper output to 1.6 million tonnes by 2035, which would make it one of the largest producers in the world.
While it has the ability to self-fund its growth pipeline, Glencore has said it would look at value-accretive partnerships and other opportunities to reduce the financial and operational risk on certain projects.
Much of its strategy is centred on a series of brownfield expansions and projects that leverage existing infrastructure or assets.
Berenberg said: “We believe the market is not fully pricing in Glencore’s specific, de-risked approach for copper growth.
“In our view, the company is well positioned to successfully execute its projects, underpinned by the highly capital-efficient, brownfield nature of its pipeline.”
It adds that Glencore’s increase in copper production is strategically timed to capture premium pricing at a time when the market is faced with structural supply issues and resilient demand.
Berenberg said the clear path to doubling copper output offered “significant re-rating potential for the shares, with some downside protection for investors coming from the fact that Glencore remains a possible M&A target.
The company, which held merger talks with Rio Tinto Ordinary Shares (LSE:RIO) earlier this year, is due to post a production update on 29 July before half-year results on 5 August.
Writing in Glencore’s annual report, chief executive Gary Nagle said the standalone investment case was strong with annualised free cash flow generation at spot commodity prices “a very healthy” $7 billion (£5.3 billion).
Nagle added: “We have a well-diversified business across a range of commodities, supported by one of the best marketing franchises in the industry.
“We are uniquely positioned to support the energy needs of today while providing many of the transition enabling commodities the world needs as demand changes.”
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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 may also recommend additional top-up distributions.
It paid the sterling equivalent of 6.29p a share on 3 June, which is the first of two instalments in relation to the 17 US cents share or $2 billion declared in relation to 2025.
The full-year sum included a top-up cash distribution of seven US cents a share or $800 million relating to an agribusiness merger involving its interest in grain handler Viterra.
Berenberg sees the dividend growing to 24 US cents in the current financial year before a jump in the payout ratio from 41% to 93% of earnings leads to an 8%-yielding estimate of 63 US cents in 2027.
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