The Mineral Resources Limited (ASX: MIN) share price is pushing higher on Thursday morning.
At the time of writing, the mining and mining services company’s shares are up 1% to $42.67.
Despite this, the Mineral Resources share price is still down a disappointing 19% since this time last month.
Is this a buying opportunity?
While the last 30 days have been very disappointing for shareholders, one leading broker appears to believe it could be a buying opportunity for non-shareholders.
According to a note out of Macquarie Group Ltd (ASX: MQG) from the end of last month, the broker has an outperform rating and $77.00 price target on the company’s shares.
Based on the current Mineral Resources share price, this implies potential upside of 80% over the next 12 month.
Macquarie likes the company due partly to its bullish view on lithium. Mineral Resources has exposure to the battery making ingredient through the Mt Marion Lithium Project and the Wodgina Lithium Project. The latter is one of the largest known hard rock lithium deposits in the world with a production life of over 30 years.
The broker has also been pleased with recent updates on the Lockyer Deep-1 well. While it is early days, it notes that the company has successfully encountered gas in the Perth Basin. Macquarie sees decarbonisation opportunities for the company by switching to LNG from diesel fuel at its mining operations in Western Australia.
Is anyone else bullish on the Mineral Resources share price?
Another leading broker also sees a lot of value in the Mineral Resources share price at the current level.
A note out of Bell Potter from last week reveals that its analysts have a buy rating and $54.25 price target on the company’s shares.
This implies potential upside of 27% for the Mineral Resources share price over the next 12 months.
It commented: “Prior to the end of CY21, we anticipate Government decisions on approvals for MIN’s iron ore development projects. The successful development of these iron ore projects would result in a step-change to both the scale and commodity- price sensitivity of MIN’s iron ore business. On balance, we consider that short-term downside risks of iron ore price volatility are more than compensated for by our risked valuations for the iron ore projects.”
“Longer-term, there is the potential of MIN’s energy investments to add another dimension to the existing services and commodities businesses. Changes to our earnings estimates with this update include a 41%, 19% and 10% decreases to CY22e, CY23e and CY24e respectively, resulting primarily from changes to our forecast commodity prices and our iron ore grade and quality discounts,” it added.