Assessing South32’s Valuation As Manganese Recovers And Mozal Faces Planned Shutdown

Simply Wall St.01-23 20:34

South32 (ASX:S32) is back in focus after a faster than expected recovery at its Australian manganese operations following cyclone disruptions, alongside plans to halt production at its Mozal aluminium...

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The 1 year total shareholder return of 27.86% and 5 year total...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK7095":"多种金属与采矿","S32.AU":"SOUTH32 LTD","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","BK7507":"资源股"},"translate_title":"随着锰业复苏和Mozal面临计划关闭，评估South32的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"S32.AU":1.5,"DCF":1},"content_text":"South32 (ASX:S32) is back in focus after a faster than expected recovery at its Australian manganese operations following cyclone disruptions, alongside plans to halt production at its Mozal aluminium smelter in Mozambique. See our latest analysis for South32. Those production updates appear to sit alongside a strong run in the shares, with a 30 day share price return of 25.07% and a 90 day share price return of 35.49%. The 1 year total shareholder return of 27.86% and 5 year total shareholder return of 109.48% point to momentum that has built over time rather than only in the latest quarter. If South32 has you thinking more broadly about resources exposure and ownership, it could be a good moment to widen your search with fast growing stocks with high insider ownership. With the share price now sitting close to analyst targets but screens suggesting a large intrinsic discount, the key question is whether South32 is still trading below its underlying value or whether the market is already pricing in future growth. AdvertisementMost Popular Narrative: 5.7% Overvalued South32's most followed narrative puts fair value at A$4.15 per share, slightly below the last close of A$4.39, which sets up a tight valuation debate.  Ongoing efficiency improvements, lower operating unit costs at key alumina and aluminum operations, and mine life extensions at Worsley, Cannington, and GEMCO, enabled by new reserve additions and process innovations, drive sustainable free cash flow and underpin net margin expansion.  Read the complete narrative. Curious what earnings path and margin profile justify that fair value gap to the current price? The narrative leans on rising profitability, moderated growth, and a richer future earnings multiple. Want to see exactly how those moving parts fit together into one valuation story? Result: Fair Value of A$4.15 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the outlook leans heavily on securing long term power for Mozal and Hillside, and on major project spending at Taylor and Sierra Gorda staying on track. Find out about the key risks to this South32 narrative. Another Take: DCF Points To A Very Different Picture While the consensus narrative tags South32 as about 5.7% overvalued at A$4.15 per share, our DCF model presents a much wider gap, with an estimated fair value of A$10.94. Trading at A$4.39, that indicates a very large discount. Is this a genuine long term mispricing or a sign that cash flow assumptions are too optimistic? Look into how the SWS DCF model arrives at its fair value. S32 Discounted Cash Flow as at Jan 2026Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out South32 for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 880 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.  Build Your Own South32 Narrative If you are not on board with these assumptions or prefer to test your own view against the numbers, you can build a custom thesis in minutes with Do it your way. A great starting point for your South32 research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision. Looking for more investment ideas? If South32 has sharpened your focus, do not stop there. The Screener can surface fresh ideas that match how you like to build a portfolio.  Spot potential value candidates before they are widely talked about by scanning these 880 undervalued stocks based on cash flows for opportunities based on cash flow metrics. Back income driven goals by checking these 12 dividend stocks with yields > 3% that meet a yield threshold above 3% while you assess quality and consistency. Position yourself early in structural trends by tracking these 19 cryptocurrency and blockchain stocks that are tied to digital assets and blockchain infrastructure.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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