What’s the outlook for the Mineral Resources share price in FY23?

Investors might want to keep a watch on Mineral Resources shares…

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Key points

  • Mineral Resources shares struggled to remain composed during FY22 with heavy sell-downs and upswings
  • In light of the share price weakness and current economic climate, a number of brokers believe this has created a buying opportunity
  • In the past 12 months, the Mineral Resources share price has lost close to 30%

The Mineral Resources Ltd (ASX: MIN) share price went through a few hair-raising moments in FY22.

Peaking at $65.38 on 30 July 2021, the company’s share price then fell to a 52-week low of $36.95 on 10 November.

However, it wasn’t long before its shares picked up momentum to hit an all-time high of $66.88 two months later.

But, once again, the share failed to hold ground and is now trading at $43.79 apiece – a 34.5% decline from its record high.

What’s ahead for Mineral Resources shares?

While no one knows where the Mineral Resources share price will be in FY23, we turn to our industry experts to get a clearer picture.

Analysts at Goldman Sachs upheld their buy rating with a price target of $65.40 for the company’s shares.

The broker believes there is significant value at the current price despite some downside risks at the present time.

They include lower lithium prices, pressure on low-grade iron ore price realisations, and cost performance at operating assets.

In addition, construction risks could spell uncertainty at Mineral Resources’ Wodgina, Kemerton, and Mt Marion lithium projects, as well as its Ashburton and Port Hedland iron ore projects

This is because of an expected drop in global commodities demand over the next 12 months.

At the same time, cost inflation for the mining sector is ramping up amid rising energy and labour costs.

Nonetheless, Goldman Sachs remains positive on commodities and the Australian mining sector over the medium term.

It is forecasting a recovery in China’s infrastructure and property construction sector for the rest of the calendar year. It believes Chinese government stimulus, higher infrastructure spending, and property policy easing will be key driving factors.

Furthermore, the team noted a more favourable AUD/USD exchange rate, as well as lithium pricing lags, is also providing support.

The team at UBS is also confident Minerals Resources shares will go higher. The broker raised its price target by 32% to $72.00 per share.

Based on the last closing price, this implies an upside of roughly 66% for investors.

Lastly, as reported by my Fool colleague Brooke, Jefferies also remains buoyant on the miner’s shares with a $65.00 a share rating.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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