One of the hottest commodities this year has been copper.
Due to a combination of supply risks and improving demand prospects for energy transition metals, the red metal has been soaring since the start of the year.
The good news for investors is that it may not be too late to gain exposure to copper, with one ASX mining stock still offering investors significant upside potential according to analysts.
Which ASX copper stock is a buy?
The company in question is Aeris Resources Ltd (ASX: AIS).
According to a note out of Bell Potter, it believes that a recent pullback has presented investors with a "second chance saloon" to pick up the ASX copper stock. It commented:
AIS has retreated ~36% from its recent share price high of $0.335/sh in late May 2024, correlating closely with the recent rally and pullback in the copper price. Company specific factors are always at play, but we highlighted (March 2024) AIS' strong leverage to the copper price and, in our view, this has been the key driver of the movements in AIS' share price.
Updating our sensitivity analysis for our latest commodity price forecasts and modelled assumptions shows AIS remains most sensitive to the copper price, with a ±5% move driving a ±25% swing in our valuation. AIS' unhedged copper exposure is one of the key tenets of our investment thesis. We remain bullish on the outlook for copper and see the current pullback as an opportunity to gain exposure via AIS' Australian operations.
30% upside
The note reveals that Bell Potter has reaffirmed its buy rating and 30 cents price target on the ASX copper miner.
Based on its current share price of 23 cents, this implies potential upside of 30% for investors over the next 12 months. It concludes:
There are no EPS changes in this report and our NPV-based valuation is unchanged. AIS is a copper dominant producer with all its assets in Australia. Its near-term outlook is highly leveraged to the copper price and increasing copper grades and production at the Tritton copper mine. Successful delivery offers significant upside to the share price and demonstrates a strategically attractive asset in Tritton, making AIS vulnerable as a corporate target. We retain our Buy recommendation.
Overall, this could be a good option for investors that are on the lookout for exposure to a booming side of the share market right now.
