Credit Suisse: South32 Ltd shares are worth $3.20

Analysts at Credit Suisse have slapped a neutral rating on shares in coal and metals miner South32 Ltd (ASX: S32). The analysts’ share price target of $3.20 is just a few cents above its last closing price of $3.23.

South32 shares are up 32% over the past year as commodity prices gained ground in a phenomenon that was generally attributed to a stronger global economy and inflation lifting off previously low levels. In particular the group has been a big winner from a coal price that went gangbusters over FY 2017.

For the year ending June 30 2017, South 32 posted a net profit of US$1.2 billion on revenues of US$6.95 billion and rewarded investors with a final dividend of US6.4 cents per share. That dividend payout totalled US$334 million and represented around half of the miner’s earnings for the six-month period ending June 30, 2017.

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Motley Fool contributor Tom Richardson has no financial interest in any company mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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