Glencore tipped to be a highlight among miners third-quarter earnings season

RBC anticipates the upcoming Q3 earnings season will be a critical test for European miners, with Glencore expected to be a highlight as it's projected to maintain production guidance and see sharply rising copper volumes in H2. While major players like Rio Tinto, Glencore, and Antofagasta face pressure to meet lower-end output guidance for iron ore and copper, RBC also identifies potential upside for Norsk Hydro and Valterra, contrasting with possible estimate downgrades for Antofagasta and Boliden due due to weaker volumes.

Analysis

The upcoming third-quarter earnings season is positioned as a critical juncture for European miners, who face mounting pressure to deliver on full-year production guidance with limited time remaining for operational catch-ups. According to RBC, there is a clear divergence in outlooks across the sector. Glencore (GLEN) is singled out as a potential highlight, expected to maintain its production guidance, driven by a projected sharp increase in copper volumes during the second half. Despite this positive outlook, Glencore, along with Rio Tinto (RIO) and Antofagasta (ANTO), must still stretch output to meet the lower end of their iron ore and copper guidance ranges. In contrast, Antofagasta and Boliden are flagged for potential estimate downgrades on the back of weaker volumes. Other pockets of strength are anticipated, with Norsk Hydro's Q4 guidance expected to beat consensus, Valterra poised to benefit from operational recovery post-flooding, and both Ecora Resources (ECOR) and Sibanye Stillwater (SBSW) having potential for positive catalysts from asset contributions and inventory releases, respectively.

Key Decisions for Investors

• Consider overweighting Glencore (GLEN) as it is flagged as a preferred name with strong H2 copper volume catalysts, but monitor Q3 results closely to confirm it is on track to meet at least the lower end of its guidance.
• Investors holding Antofagasta (ANTO) and Rio Tinto (RIO) should exercise caution, as both are cited for production volume pressures, with Antofagasta specifically facing the risk of negative estimate revisions.
• Explore relative value opportunities by favoring other positively identified miners like Norsk Hydro, where analyst forecasts are ahead of consensus, or precious metals producers Endeavour Mining (EDV) and Hochschild Mining (HOC), which are noted for standing out in their sub-sector.