Broker snap: Tradenext sees upside at Glencore Xstrata

14th Jun 2013 12:35

Tradenext has reiterated its 'buy' rating for diversified miner and commodities trader Glencore Xstrata on recent developments in the boardroom and on credit facilities.The company said earlier this week that it would appoint former Morgan Stanley boss John Mack as a Director. Tradenext's Head of Strategy Ronnie Chopra said that Mack was renowned for a massive cost-cutting campaign whilst at the US bank and "it is hoped that he will help reduce costs significantly at Glencore and improve margins and profitability for shareholders as Glencore shares languish close to all-time lows".Meanwhile, it as announced on Friday that the group had signed $17.3bn of revolving credit facilities replacing the pre-merger funds of Glencore and Xstrata. While the stock was trading higher on Friday morning on the back of the news, Tradenext still thinks it offers good value at current levels."The developments today have created an ideal cut-price opportunity to buy into one of the largest diversified miners in the world," Chopra said."Our end-of-year target is 400p as cost-cutting measures and improved margins come through to boost profits," he said.