FTSE 100 commodities giant Glencore (LSE: GLEN) has spent the past year quietly rebuilding momentum across its core operations.
Yet despite stronger production, firmer metals’ pricing and a strategic pivot to copper, it still trades at a big discount to its underlying worth.
With analysts forecasting robust medium‑term earnings growth, the key question now is how high can the stock go from here?
Strong earnings growth momentum?
Strong, sustained earnings growth is the key driver for any company’s share price over time. A risk for Glencore is any setback at its Kamoto Copper Company (KCC), Mutanda or South American mines that could slow its earnings momentum. Another is any long-term bearish trend in copper or coal pricing, which could underline the strong cash generation seen in 2025.
Nevertheless, analysts forecast that its earnings will jump by an average of 23.1% a year over the medium term. The momentum behind this was seen in its 2025 results released on 18 February this year.
Adjusted EBITDA soared 49% year on year in the second half to $8.1bn (£6bn), pushing full‑year adjusted EBITDA to $13.5bn. Revenue jumped 7% to $247.5bn, while operational cash generated before working capital, interest and tax was $10.6bn.
What’s the energy transition plan?
The numbers highlighted the growing weight of Glencore’s copper‑led strategy. Management believes copper will remain the single most critical metal for the global energy transition. And Glencore owns one of the most capital‑efficient portfolios of copper assets in the world.
CEO Gary Nagle underlined the near-50% rise in second‑half copper production, driven by stronger grades and recoveries at key assets. These include KCC, Mutanda, Antapaccay and Antamina. And the finalisation of the KCC land access package unlocks life‑of‑mine extensions and a pathway to around 300,000 tonnes per annum of copper.
These are crucial to Glencore’s plan to exceed a million tonnes of annualised copper output by 2028.
So where ‘should’ the stock be trading?
When valuing a business, discounted cash flow (DCF) analysis remains one of the clearest ways to estimate where a stock should be priced. It does this by projecting future cash flows and translating them into today’s money.
Naturally, the less certain those forecasts are, the higher the return investors demand — and the heavier the discount becomes. Analysts’ DCF models differ widely, with some more bullish than mine and others more restrained. But using my own assumptions — including an 8.3% discount rate — Glencore shares are 49% undervalued at their current £5.57 price.
That points to a fair value of £10.92, nearly double the current price. If markets continue drifting towards fair value over time, this could be a superb opportunity if those DCF assumptions hold.
My investment view
Glencore’s rising earnings momentum, copper strategy aligned to long‑term structural demand, and deep undervaluation look hard to ignore.
The 2025 results highlight a business with improving operational performance and a clear pathway to materially higher cash flows.
I already hold several stocks in the commodities sector, so buying another would unbalance my portfolio. Instead, I am eyeing other deeply discounted stocks in other sectors, often with high yields attached.
However, for investors without this problem and willing to look beyond short‑term commodity swings, I think Glencore is worthy of serious consideration.
