It's been a pleasing end to the trading week so far this Friday for the South32 Ltd (ASX: S32) share price.
At the time of writing, South32 shares are up a healthy 2.41% at $3.83 each. That looks pretty good against the S&P/ASX 200 Index (ASX: XJO), which is also up today but only by 0.39%.
But this diversified miner has had a lacklustre few months. South32 shares remain down by almost 6% over 2022 thus far, although the company is up a far more pleasing 29.4% over the past year.
So where might this mining company be heading next?
This ASX broker rates South32 share price as a buy
Well, it's a decisive 'higher' if you ask one of ASX's most prominent brokers. As my Fool colleague James covered earlier this week, broker Morgans is currently very bullish on the South32 share price.
Morgans currently rates the miner as an add. It has a 12-month share price target of $6 on the company's shares.
If this share price target became reality, it would mean that South32 shares are heading more than 56% higher over the coming 12 months. Here's some of how Morgans justified this optimistic share price target:
S32 has transformed its portfolio by 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.
Morgans is also expecting big things from South32 when it comes to dividends. It has pencilled in a fully franked annual dividend of 28 cents per share for FY2022, which it sees rising to 35 cents per share for FY2023.
If this did turn out to be accurate, investors would enjoy forward yields of 7.25% and 9.07% on today's pricing.
Another broker who sees $6
Morgans is not the only broker licking its lips over the South32 share price today though. As we covered last month, brokers at Macquarie are also eyeing off the company "due to the company's attractive valuation, strong free cash flow generation, and positive dividend outlook".
Macquarie has an outperform rating on South32 shares, also with a share price target of $6. It's expecting even higher dividends from the miner, forecasting payments of 34.5 cents per share for FY2022 and 40.6 cents per share for FY2023.
At the current South32 share price, this ASX 200 miner has a market capitalisation of $17.75 billion, with a dividend yield of 4.36%.
