Now could be the time to buy Mineral Resources Ltd (ASX: MIN) shares.
That's the view of analysts at Bell Potter, which believe the ASX 200 mining stock could rise materially from current levels.
What is the broker saying about this ASX 200 mining stock?
Bell Potter has been looking over the mining and mining services company's quarterly update. It appears to have been relatively pleased with the quarter. The broker said:
Production and costs were generally in line with guidance and our expectations. Commodity pricing was slightly stronger than our assumptions, particularly in lithium spodumene concentrate. MIN reported good progress on completing the Onslow Iron Project, guiding October 2024 completion of the dedicated haul road, and reporting shipments of 319kt at 58.1% Fe.
However, it has downgraded its earnings estimates to reflect changes to its iron ore and lithium price forecasts. It explains:
We reduce our long-term forecast Iron Ore price to US$95 per tonne (prev. US$100 per tonne). We reduce our lithium prices, forecasting they remain at around $1,000/t (SC6) for 1HFY25 and $1,200/t 2HFY25 before trending back to our long term forecast of $1,600/t from 1HFY26. We increase our allowances for Onslow Iron Stage 2 capital expenditure to $1b from $600m, following management commentary. EPS changes in this report include: FY24 -2%, FY25 -51%, FY26 -1%, mainly due to the reductions in our forecast lithium prices.
Big returns
In response to the above, the broker has reaffirmed its buy rating on the ASX mining stock with a trimmed price target of $80.00 (from $84.00).
Based on its current share price of $53.87, this implies potential upside of 49% for investors over the next 12 months.
Bell Potter believes that it is worth sticking with the company for a number of reasons. It concludes:
MIN is establishing a very-large iron ore business that will transform the company's earnings base and enable future growth. In addition to growth project execution capabilities, MIN continues to utilise every trick in the book to fund its growth. We expect significant newsflow on plans with the FY24 results including details on (1) FY25 guidance, (2) the Onslow Iron Stage 2 expansion to 50Mtpa, and potentially, (3) development and financing options for MIN's energy discoveries.
Overall, the broker appears to believe that this could make the ASX 200 mining stock a great option if you are looking for exposure to this side of the market.
