6 ASX mining shares just upgraded by brokers

But there's a fly in the ointment.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • Investors are loving ASX mining shares right now, with the S&P/ASX 300 Metals & Mining Index up by almost 25% in just three months 
  • These stocks have been upgraded by the pros today
  • But there's a fly in the ointment -- many of these ASX mining shares are already trading above the brokers' raised valuations 

A collection of ASX mining shares have been upgraded by various brokers today.

While the upgrades demonstrate increased confidence in these ASX mining shares, many are already trading above the brokers' raised valuations.

Over the past three months, the S&P/ASX 300 Metals & Mining Index (ASX: XMM) has increased by almost 25%.

Investors are likely more enthusiastic about ASX mining shares now that China has dumped its COVID-19 Zero policy. This significantly disrupted the Chinese economy and affected demand for our exports.

A group of people in suits and hard hats celebrate the rising share price with champagne.

Image source: Getty Images

Which ASX mining share got the biggest price forecast bump?

According to The Australian, Goldman feels a lot more confident about the prospects for ASX copper share Sandfire Resources Ltd (ASX: SFR).

The broker has raised its 12-month share price target by a whopping 38% to $4.50. But Sandfire shares are already trading well above this at $6.20, down 1.12% at lunchtime on Friday.

Goldman has also upgraded its share price target on ASX iron ore share Champion Iron Ltd (ASX: CIA) by 22% to $8.40.

Champion Iron shares are swapping hands for $7.76 today, up 0.91%. So, there's a bit of potential upside available for investors here.

The broker has also raised its price target for South32 Ltd (ASX: S32) shares by 17% to $4.20. South 32 shares are already above this point, trading at $4.64 today, up 1.98%.

Conversely, Credit Suisse is not so confident and has cut its recommendation on South 32 shares to neutral.

Goldman upped its price target for BHP Group Ltd (ASX: BHP) shares by 12% to $48.10. But investors are more bullish, pushing BHP shares to $49.89 today, up 1.03%.

Goldman also backs ASX coal share New Hope Corporation Limited (ASX: NHC).

The team has raised its price target on New Hope shares by 26% to $4.90. But the New Hope share price has soared well beyond this to $6.27, up 5.91% on no news from the company at all today.

At the time of writing, it's the top-performing share on the S&P/ASX 200 Index (ASX: XJO) today, according to ASX data.

They've also raised their forecast for the thermal coal price by 18% to US$275 per tonne for 2023.

Goldman also sees Rio Tinto Limited (ASX: RIO) heading 9% higher to $130 per share. Rio Tinto is currently trading at $122.85 per share, up 1.39% today.

Barclays has raised its recommendation on Rio Tinto shares to equal weight.

What's got the brokers positive on ASX resources stocks?

In a new note, Goldman Sachs says it is forecasting a commodity price recovery in the second half of FY23:

While we continue to think 1Q23 will be a tough quarter for base metals and steel due to ongoing weak European and global demand, our expectation of a China reopening in 2Q, extreme lows in global base metal inventories and ongoing supply side disruptions make us positive on a 2H commodity price recovery.

Goldman said it was "most positive" on 62% fe and high-grade iron ore, as well as coking coal, due to an expected increase in Chinese steel production.

The broker is also optimistic about copper, aluminium, and zinc due to low global inventories and supply-side disruptions.

It cites copper production issues in Chile and a "slow restart of European aluminium and zinc smelters" as reasons for the shortages right now.

Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Barclays Plc. 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.

More on Resources Shares

Two workers on site discuss the next stage of this civil engineering job.
Resources Shares

This ASX mining stock just jumped. Here's what's driving the move today

Nickel Industries shares are in the green today.

Read more »

A business person directs a pointed finger upwards on a rising arrow on a bar graph.
Broker Notes

Why this buy-rated ASX mining share is tipped to surge 112%

A leading broker expects this ASX mining share to more than double investors’ money in a year.

Read more »

A woman in high visibility clothing and a hard hat stands in front of an aluminium smelter.
Resources Shares

Rio Tinto just locked in a major deal. Here's why investors are buying today

Rio Tinto shares rise after announcing a major aluminium deal.

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Resources Shares

Are these 3 ASX 200 mining shares a buy, hold, or sell?

What changes have the experts made to their ratings and price targets since the war in Iran began?

Read more »

A man in a hard hat gives a thumbs up as he holds a clipboard in one hand against a blue sky background.
Resources Shares

ASX mining shares have slumped but long-term outlook is positive

The ASX 200 materials sector has slumped 19% since the war in Iran began.

Read more »

Two workers working with a large copper coil in a factory.
Broker Notes

Should you buy this $8 billion ASX 200 copper stock amid surging global demand?

A leading analyst drills into the outlook for this $8 billion ASX copper miner.

Read more »

Cheerful businessman with a mining hat on the table sitting back with his arms behind his head while looking at his laptop's screen.
Resources Shares

4 of the best ASX mining stocks to buy in the current environment

Bell Potter is bullish on these miners. Let's see why.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Resources Shares

Buy, hold, sell: Copper, gold, and lithium ASX stocks

These three shares offer exposure to copper, gold, and lithium.

Read more »