The South32 Ltd (ASX: S32) share price continued its slide on Wednesday.
The mining giant's shares ended the day over 1% lower at $4.41.
This means the South32 share price is now down 19% from the record-high of $5.44 it reached in March.
Is the South32 share price good value now?
While the recent pullback in the South32 share price is disappointing for shareholders, it could be a buying opportunity for non-shareholders.
In fact, the team at Morgans recently rated the company as one of its "best ideas" on the Australian share market.
According to the note, the broker has an add rating and $6.10 price target on the company's shares.
Based on the current South32 share price, this implies potential upside of 38% for investors over the next 12 months.
In addition, the broker expects big dividends from the mining giant. It has forecast fully franked dividends per share of 25.8 cents in FY 2022 and 35.3 cents in FY 2023. This represents yields of 5.8% and 8%, respectively, over the next couple of years.
What did the broker say?
Morgans is a fan of the company due to its diverse production and exposure to ESG-friendly commodities.
It explained:
S32 has transformed its portfolio divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32's risk and ESG profile.
Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength).
We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.
