Glencore (GLNCY) AI Stock Analysis

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Glencore

(OTC:GLNCY)

58Neutral

Glencore's overall score is driven by mixed financial performance and a bearish technical outlook. While some segments showed resilience, profitability and leverage concerns weigh heavily, reflected in negative earnings and high debt levels. The earnings call provided some positive news regarding segment performance and strategic initiatives. However, the lack of technical momentum and valuation concerns due to negative P/E keep the overall score moderate.

Glencore (GLNCY) vs. S&P 500 (SPY)

Market Cap

$38.57B

Dividend Yield3.5%

Average Volume (3M)1.34M

Price to Earnings (P/E)―

Beta (1Y)1.23

Revenue Growth6.24%

EPS Growth-139.16%

CountryUS

Employees84,146

SectorBasic Materials

Sector Strength60

IndustryIndustrial Materials

Share Statistics

EPS (TTM)-0.27

Shares Outstanding6,038,481,000

10 Day Avg. Volume2,277,515

30 Day Avg. Volume1,338,134

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.21

Price to Cash Flow (P/CF)4.60

P/FCF Ratio8.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$10.20

Price Target Upside49.56% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Glencore Business Overview & Revenue Model

Company DescriptionGlencore plc is a leading multinational commodity trading and mining company headquartered in Baar, Switzerland. The company operates across three main sectors: metals and minerals, energy products, and agricultural products. Glencore is involved in the production, processing, storage, logistics, and marketing of a diverse range of commodities, including copper, cobalt, zinc, nickel, coal, oil, and various food products. With a global presence, Glencore serves industries worldwide, providing essential resources and raw materials that drive economic development and industrial growth.

How the Company Makes MoneyGlencore makes money primarily through its diversified operations in commodity trading and industrial activities. The company's revenue streams are mainly derived from the production and sale of metals and minerals, energy products, and agricultural commodities. In the metals and minerals sector, Glencore extracts and processes resources like copper, zinc, nickel, and coal, which are sold to industrial clients across various sectors, including construction, electronics, and automotive. In the energy products sector, Glencore's revenue comes from the extraction, refinement, and trading of oil and coal products. Additionally, the company is engaged in agricultural trading, dealing in grains, oils, and sugar. Significant partnerships with mining companies, oil producers, and logistics firms enhance Glencore's ability to efficiently supply and deliver commodities globally, thereby contributing to its earnings.

Glencore Financial Statement Overview

Summary

Glencore's financial performance shows challenges in revenue and profit margins, with a negative revenue growth rate and decreased profit margins. Although operational efficiency is strong, the significant decline in free cash flow and stable balance sheet leverage indicates a need for improved cash management and revenue generation.

Income Statement

Positive

Glencore's income statement shows decreasing revenue from 2022 to 2023, leading to a negative revenue growth rate of -14.89%. The gross profit margin dropped to 4.95%, and the net profit margin decreased to 1.96% in 2023. However, the company maintains a strong EBITDA margin of 7.03%, reflecting operational efficiency despite the decline in total revenue.

Balance Sheet

Positive

The balance sheet reflects a stable capital structure with a debt-to-equity ratio of 0.74, indicating balanced leverage. The return on equity stands at 9.82%, showing effective use of equity to generate profits. The equity ratio of 35.18% suggests a moderate reliance on equity financing.

Cash Flow

Positive

The cash flow statement highlights a significant decline in free cash flow by 30.93% from 2022 to 2023. The operating cash flow to net income ratio is strong at 2.58, indicating efficient cash generation. However, the free cash flow to net income ratio of 1.53 suggests a need for improved cash flow management relative to earnings.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
244.62B	217.83B	255.98B	203.75B	142.34B	215.11B
	Gross Profit
20.34B	10.78B	27.26B	12.38B	3.70B	4.68B
	EBIT
17.74B	8.70B	27.48B	12.92B	2.41B	3.55B
	EBITDA
28.19B	15.32B	34.47B	12.62B	2.76B	8.18B
	Net Income Common Stockholders
15.81B	4.28B	17.32B	4.97B	-1.90B	-404.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.05B	1.93B	1.97B	2.69B	1.42B	1.90B
	Total Assets
128.67B	123.87B	132.58B	127.51B	118.00B	124.08B
	Total Debt
34.99B	32.24B	28.78B	34.64B	37.48B	37.04B
	Net Debt
32.95B	30.32B	26.93B	31.95B	36.06B	35.14B
	Total Liabilities
83.29B	85.63B	87.36B	90.59B	83.60B	84.84B
	Stockholders Equity
45.74B	43.58B	49.41B	39.93B	37.64B	40.27B
Cash Flow		Free Cash Flow
7.68B	6.55B	9.48B	5.24B	-905.00M	4.02B
	Operating Cash Flow
11.65B	11.04B	13.66B	8.86B	2.66B	8.73B
	Investing Cash Flow
-2.86B	-3.56B	-1.72B	-541.00M	-2.71B	-3.72B
	Financing Cash Flow
-8.61B	-7.49B	-13.20B	-6.52B	-320.00M	-5.15B

Glencore Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.82

Price Trends

50DMA

7.90

Negative

100DMA

8.56

Negative

200DMA

9.62

Negative

Market Momentum

MACD

-0.24

Positive

RSI

28.92

Positive

STOCH

8.60

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GLNCY, the sentiment is Negative. The current price of 6.82 is below the 20-day moving average (MA) of 7.26, below the 50-day MA of 7.90, and below the 200-day MA of 9.62, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 28.92 is Positive, neither overbought nor oversold. The STOCH value of 8.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GLNCY.

Glencore Risk Analysis

Glencore disclosed 11 risk factors in its most recent earnings report. Glencore reported the most risks in the “Macro & Political” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Glencore Peers Comparison

Overall Rating

UnderperformOutperform

Sector (47)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VALE	74 Outperform	$38.43B	6.25	16.72%	8.39%	-8.71%	-22.75%
RIO	74 Outperform	$94.84B	7.71	20.93%	7.28%	-0.81%	14.59%
BHP	70 Outperform	$114.84B	9.71	26.13%	5.63%	-3.15%	54.08%
MP	61 Neutral	$3.85B	―	-5.41%	―	-19.57%	-392.96%
GLNCY	58 Neutral	$38.57B	―	-3.85%	3.50%	6.24%	-139.16%
NEXA	51 Neutral	$793.31M	―	-20.22%	―	6.28%	29.57%
Sector *	47 Neutral	$2.43B	-3.06	-22.76%	3.59%	4.02%	-29.07%

* Basic Materials Sector Average

Performance Comparison

GLNCY

Glencore

6.82

-4.77

-41.16%

BHP

BHP Group

45.25

-11.08

-19.67%

RIO

Rio Tinto

56.86

-5.77

-9.21%

VALE

Vale SA

9.22

-1.91

-17.16%

NEXA

Nexa Resources SA

5.99

-1.13

-15.87%

MP Materials

22.68

6.18

37.45%

Glencore Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: -22.06% | Next Earnings Date: Aug 6, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a strong performance in the metals and marketing segments, with significant contributions from EVR and successful cost management in zinc. However, the overall adjusted EBITDA was down due to lower energy prices, and there were challenges in marketing debt and lease management. The company's proactive approach in managing supply and cash distribution is positive, but the pressures in energy coal and custom metallurgical business present challenges.

Highlights

Strong Adjusted EBITDA

Glencore finished the year with an adjusted EBITDA of $14.4 billion, with the industrial business contributing $10.6 billion, driven by strong metals performance.

Successful Integration of EVR

EVR contributed $1 billion to EBITDA in the second half of the year, with production up 8% and costs down 14% compared to the first half.

Strong Marketing Performance

Marketing EBIT was at the top end of the $2.2 billion to $3.2 billion guidance, totaling $3.2 billion, mainly driven by metals.

Cash Distribution and Buybacks

Announcement of a $1.2 billion cash distribution to shareholders and a $1 billion buyback to be completed by August 6.

Resilient Zinc Business

Zinc EBITDA improved with strong cost reductions and optimization, contributing $1.4 billion.

Lowlights

Decline in Overall Adjusted EBITDA

Adjusted EBITDA was down 16%, mainly due to lower energy prices affecting the industrial segment.

Marketing Debt and Lease Challenges

Net debt finished at $11.2 billion, with movements in marketing leases and assumed debt from the EVR acquisition.

Challenges in Energy Coal

Energy coal volumes were slightly lower, and there are plans to address production cuts to balance the market.

Pressure on Custom Metallurgical Business

A $0.6 billion negative variation year-on-year was noted, affecting copper in North America and the European zinc portfolio.

Company Guidance

In the 2024 financial results call, Glencore reported a strong financial performance, achieving an adjusted EBITDA of $14.4 billion, with the industrial business contributing $10.6 billion, largely driven by the metals sector. The marketing segment also performed well, hitting the top end of its EBIT guidance range of $2.2 billion to $3.2 billion. The company maintained a net debt to adjusted EBITDA ratio below 0.8 and announced a cash distribution of $1.2 billion to shareholders, along with a $1 billion share buyback set to be completed by August 6. Glencore highlighted the successful integration of its new EVR business, which contributed $1 billion to EBITDA in the latter half of the year, and emphasized ongoing cost reduction initiatives, including a 14% decrease in FOB cash costs in the second half. The company also discussed its strategy regarding future copper projects, focusing on supply discipline and market conditions before advancing with expansions.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.