If you're looking for exposure to the mining sector, then it could be worth considering the two ASX mining stocks named below.
That's because they have been rated as buys and tipped to rise strongly from current levels. Here's what you need to know about them:
Aeris Resources Ltd (ASX: AIS)
Analysts at Bell Potter think that Aeris would be a good option for investors who are looking for exposure to the booming copper price.
In response to its quarterly update, the broker has reiterated its buy rating with an improved price target of 30 cents. Based on where the ASX mining stock currently trades, this implies a potential upside of approximately 18% over the next 12 months.
Bell Potter commented:
AIS is a copper dominant producer with all its assets in Australia. On balance, we maintain our production growth forecast for Tritton to which AIS' financial performance and valuation is highly leveraged. With our higher commodity price forecasts our NPV based valuation is up 30%, to $0.30/sh and we retain our Buy recommendation.
Coronado Global Resources Inc (ASX: CRN)
Another ASX mining stock that has been named as a buy is Coronado Global Resources. It is a coal miner with a portfolio of mines and development projects in Australia and the United States.
Goldman Sachs is feeling very positive about the miner. This is despite the broker acknowledging that Coronado Global Resources' quarterly update was short of expectations due to impacts from wet weather in the Bowen Basin.
In response to the update, Goldman has retained its buy rating with a reduced price target of $1.55. Based on its current share price of $1.16, this implies a potential upside of 34% for investors over the next 12 months.
In addition, while the broker doesn't expect a dividend this year, it is forecasting a 4.4% dividend yield in FY 2025 and then a 10% yield in FY 2026.
Goldman believes that its shares are undervalued. Especially given its expectation for the company's free cash flow to improve materially from next year. It said:
[W]e continue to rate CRN a Buy on: 1. Valuation: trading at 0.65x NAV (A$1.83/sh) and discounting long run met coal of ~US$190/t (vs. GSe US$205/t real $). 2. Operational turnaround and improving FCF in 2025: with the catch-up in waste stripping complete at Curragh and the reinvestment at Buchanan over 75% complete, we think CRN is set for an operational turnaround over the next 18 months (starting in late 2024), post a multi year period of operational underperformance. That said, operational improvement in 2H is key, to establish operational credibility and re-rate the stock in our view. We forecast a ~20% lift in saleable coal production to ~19.5Mt over the next 2yrs.
