Australia has one of the largest mining sectors around and, unsurprisingly, there's no shortage of options for investors to choose from in the space on the Australian share market.
But which ASX 200 mining stocks could be buys now? Two that have recently been tipped as top buys are named below. Here's what analysts are saying about them:
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Allkem Ltd (ASX: AKE)
Although this ASX 200 mining stock has agreed to merge Livent Corp (NYSE: LTHM) to form a lithium superpower, analysts at Bell Potter don't believe it is too late to invest. This is because the broker feels the combination will result in an earnings multiple uplift. It explains:
AKE is now in-play; we think it is likely the LTHM merger will proceed and are not confident that an interloper will emerge. On a stand-alone basis the company has a strong production and earnings growth profile into what we expect to be an exceptionally strong market for lithium. Combining with LTHM and the NYSE listing could see an earnings multiple uplift. AKE is trading at a slight discount to the implied deal value, which we expect will close if deal certainty improves.
Bell Potter has a buy rating with a $19.20 price target on its shares.
BHP Group Ltd (ASX: BHP)
Another ASX 200 mining stock that has been named as a buy is BHP. The team at Goldman Sachs is bullish on the mining behemoth due to its attractive valuation and the favourable outlook for key commodities. The broker commented:
Our Buy thesis on BHP is based on: (1) Attractive valuation, but at a premium to S32 & RIO (2) GS bullish iron ore, copper and met coal, (3) Optionality with +US$20bn copper pipeline and improved production growth, (4) Robust FCF, but still below RIO & S32.
Goldman currently has a buy rating and $49.00 price target on the Big Australian's shares.
