The Mineral Resources Limited (ASX: MIN) share price may be suffering a battering today but it's up across most of the significant long-term timeframes.
The ASX lithium share is currently down 5.14% to $64.16 apiece on Monday but Mineral Resources has certainly been a standout performer zooming out. Here are the numbers:
- 41.96% over the past year
- 315.93% over five years, and
- 5,832.46% since its shares hit the market in 2006
Investors might wonder two things about these figures: Is the Mineral Resource share price overvalued, and are its predicted fundamentals reflected in its current share price?
One broker believes the Mineral Resources share price might have reached its ceiling for now and that a speculated development "could create value".
Let's cover what else the broker said.
Mineral Resources receives a hold recommendation
Spotee Connect founder Elio D'Amato gave Mineral Resources a hold recommendation, as reported by The Bull. D'Amato said:
[Mineral Resources's] shares soared to all-time highs on speculation the company may be considering spinning off its world-class lithium assets and potentially listing in the US. While a US listing won't guarantee success, splitting its lithium and iron-ore operations into separate entities could create value. While nothing was certain on September 21, the market is excited by the prospect.
Analysts are bullish on lithium demerger
D'Amato is not alone in his analysis. Earlier this month, UBS said the Mineral Resource's lithium business could be worth far more in the future. The broker gave Mineral Resources shares a price target of $83. That's a possible upside of around 29% at the time of writing.
Wilson equity strategist Rob Crookston also agrees with the thesis a demerger could be good for the company. In a memo to clients last week, Crookston said:
A speculated NYSE spin-off of the lithium business could untap hidden value in the business.
Mineral Resources share price snapshot
Despite today's losses, the Mineral Resources share price is up almost 15% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 13% over the same period.
The company's market capitalisation is currently around $12.2 billion.
