South32 shares fall 10% from all-time high: Is the rally over?

Find out if the ASX mining shares are a buy, sell, or hold now.

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South32 Ltd (ASX: S32) shares have fallen lower again in Thursday afternoon trade.

At the time of writing, the mining giant's shares are down around 5% to $4.78 each.

Today's decline means the shares have now fallen around 10% since hitting an all-time high of $5.30 last week.

But it's not all bad news. The shares are still trading 35% higher for the year to date and are a huge 82% higher than 12 months ago.

Man analysing a stock market chart, with more data on his laptop and table.

Image source: Getty Images

Why are the shares falling this week?

There hasn't been any price-sensitive news out of South32 over the past week to explain the latest share price decline.

It looks like the sell-off is a mixture of investors taking their profit off the table after a rally through July and August, combined with softer sentiment about ASX mining shares.

Renewed geopolitical tensions and higher oil prices have put pressure on inflation figures and commodity prices. These broad market pressures have seen some investors turn away from mining shares like South32.

Today is also South32's ex-dividend day. The miner announced a 7.5 cent per share final dividend as part of its latest FY26 results announcement late last month. The shares are scheduled to be ex-dividend today, with payment on the 15th of October. 

It's typical for share prices to decline on ex-dividend days because new buyers won't receive any of the upcoming dividend. 

Now the question is, is the rally over for South32 shares? Or is there more upside ahead?

Let's find out what the experts think.

Are South32 shares a buy, sell, or hold now?

Going forward, it looks like brokers are quite optimistic about the outlook for South32 shares.

Market Index data shows that the majority of brokers have a buy rating on the mining shares. The $5.13 average target price implies a potential 2% upside ahead.

On TradingView, sentiment is a little more dividend. Out of 13 analysts, six have a buy/strong buy rating, and another six have a hold rating. One rates the stock as a sell.

The average target price of $5.31 implies a potential 11% upside for South32 shares, at the time of writing.

Joshua Baker from RaaS Group has a hold rating on South32 shares, driven by a stronger commodity price outlook for key metals, including zinc. 

Elsewhere, Blake Halligan from Gray Perry Wealth Advisers has a sell rating on South32 shares. He said that, given the recent share price increase, commodity price volatility, global uncertainty, and execution risk on major projects, investors may want to consider cashing in some gains at this stage of the cycle.

The team at Morgans downgraded South32 shares to a hold after reviewing its FY26 numbers and increased its price target to $4.90. The broker said it thinks the earnings upcycle is now reflected in the latest price. It also noted that the stock has outperformed even the pure copper producers.

Motley Fool contributor Samantha Menzies 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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