South32 Limited (S32.AX) stock analysis

In our weekly check, South32 Limited is graded C (A to F). Of 24 checks on debt, profit, cash flow and trend: 15 pass, warnings: 5, red flags: 4.

About South32 Limited

South32 Limited is a Basic Materials company (Industrial Materials) based in Australia, listed on ASX as S32.AX.

What our checks show for S32.AX

Red flags

• The net margin fell by 10.1 points over 5 years, to 18.7%: the company keeps less of each sale as profit.
• The gross margin fell by 15.1 points, to 43.7%: costs are rising faster than prices.
• Analysts expect the net margin to shrink by 8.4 points from today's 18.7%.
• The stock has fallen as much as 62% from a peak. Would you have held through that?

Warning signs

• Analysts expect earnings per share to shrink about 4.7% a year.
• Analysts expect only about 4.3% a year of growth in revenue.
• Revenue grew only 1% a year over the last 3 years.
• The price swings a lot: 39.8% annual volatility. Expect large ups and downs.
• Return on capital (ROCE) is only 6.6%.

Strengths

• Debt is low: 0.19x equity.
• Operating cash flow is 1.5x net profit: the profit arrives as real cash.
• Earnings per share grew 84.8% a year over the last 3 years.
• The dividend takes 27% of profit: there is a cushion.
• The price is 12.1 times earnings (P/E), reasonable for its growth.
• A large company: market value $13.02 billion.

Similar companies

AAL.L · FMG.AX · MP · VALE · GLEN.L · MTRN

Questions

What grade does South32 Limited (S32.AX) have?

In our weekly check, South32 Limited is graded C (A to F). Of 24 checks on debt, profit, cash flow and trend: 15 pass, warnings: 5, red flags: 4. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of S32.AX stock?

This week's biggest flags for South32 Limited: Margins falling, Gross margin falling, Margins expected to shrink. In total 9 of 24 checks show a warning or a red flag.

What does South32 Limited do?

South32 Limited is a Basic Materials company (Industrial Materials) based in Australia, listed on ASX as S32.AX.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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