Will the Glencore share price rebound after analysts raise their price target on this FTSE 100 commodity stock?

After a difficult start to the year, the analyst UBS and Bank of America changed its recommendation to ‘buy’ from ‘neutral’ in March with target prices of £5.60 and £5.80. Upgrade from the analysts spread up Glencore (LSE:GLEN) share price has been falling since late January. Is it possible to reverse fortune on the cards for investors?

Glencore is a Swiss miner and commodity trader and one of the world’s largest copper producers. The metal is expected to rise in price over the next 12 months.

Increasing demand in China as the economy recovers and tight supply means copper prices could reach record highs. UBS stated “We remain cautious in the mining sector” while noting that data from China is encouraging for Glencore.

Increasing demand

Copper is a key metal in the transition to net-zero, due to its use in renewable energy technologies and electric vehicles. Demand is predicted to double by 2035 according to a report from S&P Globel. Glencore stated: “We expect demand to grow exponentially for renewable energy technologies, and the metals and minerals needed to build them”.

In February. Glencore announced full-year earnings of $34bn, up 60%. This is a consequence of high commodity prices.

It’s not all plain sailing for Glencore, however, given its exposure to thermal coal as one of Australia’s biggest coal producers.

Coal is very profitable for Glencore. But the company has promised to responsible investors to open down the mine in 2040. Glencore has stated that it will be a net-zero emission company in 2050. There is constant pressure from campaigners and investors to increase the environmental targets.

In addition, thermal coal prices have decreased after increasing in 2022. This is the result of the war in Ukraine, of course, and the ongoing energy crisis. The company noted that 2023 profits will decrease due to lower coal prices.

Glencore proposed a $23bn merger with Tech Resources on April 3 has also been rebuffed. The unsolicited hostile bid proposed that Glencore merge the two businesses and divest the combined coal business. Teck rejected the offer and cited exposure to Glencore’s thermal coal and oil trading business as undesirable.

Overall, Glencore has a strong commodity mix mining and trading oil, coal and gas, all in high demand. The energy crisis is still there and the continued need for copper as part of the energy transition is clear. Although I don’t own shares in Glencore, now may be a good time to add it to my energy portfolio.