Meet the ASX copper stock that could rise 30%

Bell Potter thinks recent weakness has created a buying opportunity.

| More on:
A smiling miner wearing a high vis vest and yellow hardhat and working for Superior Resources does the thumbs up in front of an open pit copper mine, indicating positive news for the company's share price today following a significant copper discovery

Image source: Getty Images

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

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.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Materials Shares

A person with a round-mouthed expression clutches a device screen and looks shocked and surprised.
Materials Shares

Small-cap ASX lithium stock rockets 115% on new discoveries

What is getting investors excited today? Let's find out.

Read more »

Miner looking at a tablet.
Materials Shares

South32 share price crashes 10% on FY25 guidance downgrade

How did this mining giant perform in the fourth quarter and what is next?

Read more »

A female worker in a hard hat smiles in an oil field.
Materials Shares

How much could $10,000 invested in Rio Tinto shares be worth next year

Let's see what this broker is forecasting for the miner's shares.

Read more »

A man looking at his laptop and thinking.
Materials Shares

What's happening with Lake Resources shares today?

Lake Resources is eyeing technology improvements to help cut costs.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Dividend Investing

How big will the BHP dividend be in 2025?

Let's see if the mining giant will be rewarding shareholders with more generous dividends.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

Fortescue share price falls after cost-cutting decision

The mining giant is cutting down its workforce materially to save money.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Materials Shares

Could BHP shares provide an 18% return for investors?

Let's see what Goldman Sachs is saying about this mining giant following its update.

Read more »

Two young risk-taking men pose for the camera as they jump off a cliff into the sea.
Materials Shares

How risky is buying ASX lithium shares right now?

Despite recent losses, this fund manager is holding onto these top ASX lithium stocks. Here’s why.

Read more »