Citi says Glencore is a crowded trade but for 'all the right reasons'

Analysts at Citi reiterated their 'buy' recommendation (Target price: 700.0p) for shares of Glencore despite the fact that consensus longs often go wrong.

Despite increasingly being a preferred holding in the mining space for investors, in their opinion that was so for all the right reasons: the 'ESG redemption' narrative, "massive" earnings upside from coal prices and a strong environment for the company's marketing business and cash returns.

Indeed, on bottom up 'puts and takes' on earnings before interest, taxes, depreciation and amortisation and free-cash-flow suggested 20%/28% upside for 2022 in relation to the consensus and even more in 2023, they said.

They also cited the potential for potential cash returns of $20bn.