South32 share price plunges to 2-year low. What now?

It's another day and another 52-week low for South32. But has this miner found a bottom?

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It's been another rough day for the South32 Ltd (ASX: S32) share price so far this Friday. After an initially positive start to this morning's trading, South32 shares have since plunged back into red territory and even inked a new 52-week low.

Yep, despite opening at $3.35 a share this morning before rising to $3.36, South32 shares are now sitting at $3.28 each (down 1.05%) after descending as low as $3.27 just before midday today. That's a new 52-week low for the South32 share price.

But South32 investors would be used to this by now. This ASX 200 mining share has now recorded a whopping four new 52-week lows over just the past two weeks.

It's been a tough time for ASX 200 mining shares

This new 52-week low will be especially hard to swallow though. That's because it represents the lowest share price that South32 has traded at in two years. You'd have to go back to September 2021 to find the last time that the South32 share price began with a '$3.2':

Of course, it's not just South32 that has been under pressure of late. Most ASX mining shares, including the likes of BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG), have had a rough few months. That's mostly thanks to lacklustre earnings and the seemingly continuous stream of bad economic news coming out of China, a major customer of most Australian miners.

Earlier this week, we looked at how Australia's terms of trade had recorded its largest fall in 14 years, dropping 7.9% across the June quarter. Australia's current account surplus also tanked by $4.8 billion to $7.7 billion in seasonally adjusted terms. Amongst those falls was a 14.2% drop in Australian income from metal ores and minerals exports.

Not exactly good news for ASX mining companies, so it's no surprise to see the South32 share price under pressure this week.

But now that South32 shares are at another 52-week low, what could be next for the company?

Is the South32 share price a buy following this latest 52-week low?

Well, there is some good news for South32 shareholders amid these new lows. As my Fool colleague James covered just this week, a number of ASX brokers are calling out these new lows as a buying opportunity for South32 shares.

Broker UBS has reportedly given South32 a buy rating, with a 12-month share price target of $4.30. That would represent more than a 20% upside on the current South32 share price if realised. Similarly, broker Mogan Stanley is also bullish on the company, giving South32 an overweight rating and a share price target of $4.15.

Even more optimistic in its views was morgans. This ASX broker has an add rating on the company, replete with a share price target of $5.20. That could see the company gain more than 50% from its current levels if realised.

Here's some of how Morgans justified its bullish views:

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.

So it seems good things are coming for suffering South32 shareholders right now if these brokers are to be believed. But we'll just have to wait and see if they are on the money here.

Right now, the current South32 share price gives this ASX 200 miner a market capitalisation of $14.93 billion, with a dividend yield of 3.64%.


Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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