Why this broker just downgraded Mineral Resources Limited

Shares in Australia-based mining service company Mineral Resources Limited (ASX: MIN) are up 3% at the time of writing to $17.51.

Shares in Mineral Resources have tracked up steadily in the last 12-months, rising from just $10.48 at this time last year.

A broker from wealth management group Ord Minnett downgraded Mineral Resources to accumulate from buy as Ord Minnett also lowered its price target on the stock from $20.50 down to $19.50.

The broker noted other lithium players would be a better buy at present, with Orocobre Limited (ASX: ORE), Galaxy Resources Limited (ASX: GXY) and Kidman Resources Ltd (ASX: KDR) on the broker’s preferential.

Mineral Resources released its half-year report on February 8, announcing a FY18 EBITDA guidance of $500 million as a minimum after booking a 22% rise in revenue for the six months to December 31, 2017, with NPAT up 16.4% and EBITDA up 25% over the same period.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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