Kumba Iron Ore Limited: First Take H1‘26 results: in line with pre-guide (EBITDA -6% vs cons); 2026 guidance is unchanged

Research evidence excerpt

Kumba Iron Ore Limited: First Take H1‘26 results: in line with pre-guide (EBITDA -6% vs cons); 2026 guidance is unchanged

Dominic O'Kane AC Europe Equity Research

(44-20) 7742-6729 28 July 2026 J P M O R G A N

dominic.j.okane@jpmorgan.com

Investment Thesis, Valuation and Risks

Kumba Iron Ore Limited (Neutral; Price Target: 31,400c)

Investment Thesis

We are Neutral rated on Kumba Iron Ore as we believe the material near-term headwinds

(global geopolitical risks and higher energy prices) are now more appropriately reflected in

the share price, following a sharp de-rating since early 2026. Kumba is a South African-

listed iron ore producer with 100% of its production from two assets – Sishen and Kolomela.

Kumba faces many non-controllable costs and relies exclusively on state-owned rail

operator Transnet. While we still see risks from cost inflation (including freight) and

operational dependencies in South Africa, we view current levels as closer to fair value on

our assumptions, with valuation support. Kumba’s key medium-term growth/value driver

is the UHDMS project at Sishen, which is intended to lift the share of premium product.

Valuation

Our Dec’27 Price Target is calculated as a simple average of (1) 1.0x NPV and (2) 5.5x

2028E EV/EBITDA, multiples that are below diversified, iron-ore exposed peers and

reflective of commodity and geographic concentration risk. Kumba’s NPV consists of two

mining operations (Sishen and Kolomela) discounted at a WACC of 10.5%.

Risks to Rating and Price Target

Key upside/downside risks relate to:

• Higher/lower iron ore price vs JPMe base case: A higher iron ore price would

underpin better earnings and FCF vs our base case estimates. For Kumba specifically,

a higher-than-expected lump premium would also be supportive. The opposite would