It would not take much for Glencore stock to double, Citi says

The price of Glencore stock was back to where it was in 2014 but the company's fundamentals were in fact now much improved, analysts at Citi argued.

"Glencore has performed strongly over the past 12 months; nevertheless, the stock is back to where it was trading in 2014. However, fundamentally we think the company is in a significantly better position," analysts Heath R Jansen, Ephrem Ravi, Jatinder Goel, Amit Lahoti, and Rahul Kedia said in a research report sent to clients.

It would not take much for the share price to almost double, to 600.0p, they said.

The commodity trader's "robust" investment case led them to reiterate their 'Buy' recommendation (and 400.0p target).

From the angle of the company's net present value, they saw several factors which combined could take the stock to 600.0p.

Those included a 10.0% increase in commodity prices, additional marketing volumes and higher margins, some cost improvements in industrial business, a lower Weighted Average Cost of Capital and the removal of the historical NPV discount to Citi's own NPV estimate for the firm.

In terms of earnings and cash-flows - and on the premise of no multiple re-rating - the broker believed a 600.0p share price was achievable via restarted copper and zinc volumes together with a 20% rise in spot commodity prices.