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Goldman Sachs sun upgraded its rating on the South32 share price

The South32 Ltd (ASX: S32) share price climbed 1.7% to $2.46 this morning which is fractionally above the $2.40 12 month share price target Goldman Sachs reportedly placed on the miner according to an October 10 research note. 

Analysts on the resources desk at the investment bank have updated their price forecasts for core commodities mined by South32 such as bauxite and alumina and lowered the price forecasts of both based on concerns around oversupply. For 2020/2021 Goldmans is forecasting a US$45/t bauxite price and US$320 per tonne alumina price through 2020. 

Nevertheless analysts have upgraded their rating on South32 to “neutral” from sell on the back of the stock shedding around 36% over the last 12 months. In this instance then it seems Goldman’s bearish cal on South32 has been on the money over the short term anyway. 

South32 was spun out of BHP Group Ltd (ASX: BHP) in May 2015 and back then hit the ASX boards at $2.13 per share to deliver a disappointing 12.6% return since its IPO. BHP has performed similarly to show how commodities investors are hostage to underlying commodity prices. 

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