RBC Adjusts South32 Price Target on FY26 Production Update, Aluminum Asset Sale

04:40 AM EDT, 07/21/2026 (MT Newswires) -- RBC Capital Markets revised its price target and earnings assumptions for South32 (S32.L, S32.JO) after the metals and mining company released its fiscal 2026 trading update. "With S32's FY26 production largely in line, our focus turns to S32's base metals focused portfolio and solid financial position post the agreed sale of its aluminium value chain assets for up to US$5.6B. In FY28e, S32 will derive c.85% of earnings from copper, zinc, silver and lead and have net cash of US$3.8B," according to a Monday note. "We raise our PT to [AU$5.30 from AU$4.60] and reiterate our Outperform with 30% potential return. Our revised price target reflects the aluminium value chain transaction, recent [final investment decision] of the 4th grinding line at Sierra Gorda, and FY26 update." Looking ahead, RBC analysts increased their EBITDA estimate by 16% in 2026 and 3% in 2027, while that for 2028 was cut 50% to reflect completion of South32's impending divestment of its aluminum assets to Alcoa. The research firm expects South32 to experience a re-rating, "potentially trading on a higher 1-year forward EBITDA multiple of 6-8x in line with base metals peers Sandfire Resources, Boliden [BOL.ST] and Lundin Mining."