JP Morgan has downgraded Glencore PLC (LSE:GLEN) to 'neutral' even as it keeps faith with the wider mining rally.
The US bank says the sector still has room to run, but picking winners is becoming harder after a 22% surge since the start of August.
Its preferred play is now Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF), which it rates 'overweight', while it sees less near-term upside for Glencore after a strong run.
The case for mining equities remains intact, according to JPM. Both company-specific and broader economic trends support further outperformance into 2026.
Its analysts note that earnings momentum across the sector is accelerating faster than the upgrades being pencilled in by the market.
On the bank’s mark-to-market estimates, 2026 earnings per share sit more than 15% above current consensus forecasts.
Third-quarter results, due later this month, could be the next catalyst. JPM expects those updates to trigger a new round of earnings revisions, having already lifted its own 2026 estimates by 6% for Rio Tinto and 25% for Glencore.
Still, it warns that after the recent re-rating of valuations, disappointments are likely to be punished more harshly.
The bank sees the diversified miners trading broadly at fair value, but argues that the next phase of returns will depend less on rising commodity prices and more on execution, discipline and capital allocation.
In short, the tide is still rising for miners, but investors will have to steer more carefully from here.