Glencore's share price jumps 20% as Wall Street heavyweights support

Glencore has suffered a grinding few weeks of downgrades and all-time lows, prompting analysts to question sustainability of the commodity and mining giant's debt mountain. But the downward spiral in the company's London-listed share price halted on Tuesday, rebounding as much as 20 percent to around 80 pence ($1.21).

Analysts at Citigroup, Bernstein, UBS and Credit Suisse all issued notes Tuesday on Anglo-Swiss commodity and mining group Glencore, maintaining a "buy" rating with price targets ranging between 170p and 450p.

Senior Bernstein analyst Paul Gait was the most bullish on the stock saying that the firm's industrial assets still generate positive cash margins even at a time of commodity rout.

Citi and UBS both said the stock was heavily oversold and that the divestments the company is planning over the next six months have more potential upside than the $2 billion outlined by Glencore.

Glencore's shares picked up and extended gains following this wave of support. The firm issued a statement saying it had taken measures to position the company to withstand current commodity market environment:

"Our business remains operationally and financially robust – we have positive cash flow, good liquidity and absolutely no solvency issues. We are getting on and delivering a suite of measures to reduce our debt levels by up to $10.2 billion."

"Glencore has no debt covenants and continues to retain strong lines of credit and secure access to funding ‎thanks to long-term relationships we have with the banks," the group said in a statement.

On Monday its share price tumbled some 30 percent to an all-time low of 66p after an Investec note questioned whether there was any equity value left in mining companies like Glencore and Anglo American if commodity weakness persists.

Worries over China slowdown have hit the mining sector hard, with the price of raw materials including copper, coal and oil, some of Glencore's key mined commodities, close to levels not seen since their global financial crisis.

Credit Suisse's Dan Scott - vice president of investment strategy and global research - said that "yesterday's pricing action has little to do with fundamentals." He also rates the stock a "buy" and is hesitant to offload the firm's bonds at current levels.

"Even the most bearish out there on the sell-side and I think its Nomura, has a sell target of about 120p share."

"What you saw going into yesterday's session, was very weak data out of China on industrial production and another re-pricing of macro risk and probably macro hedge funds were out there pushing down the Glencore share price," Scott added.

Citigroup said in a note released earlier that in case the equity market keeps expressing its unwillingness to value the business fairly, the company management should take the company private.

Restructuring measures could thus be taken "easily and quickly, with a potential float of just the industrial business occurring further down the track," Jansen said in a note to clients published on Tuesday.