Mineral Resources Ltd (ASX: MIN) shares have been battered in 2024, shedding over 50% of their value so far this year.
Reports of managing director Chris Ellison's actions and a $4 million settlement with the Australian Taxation Office (ATO) dragged shares lower, resulting in Ellison stepping down from the company's top role.
More broadly, lithium and iron ore prices have compressed throughout the year, the former impacting the profitability of many lithium mines in the field. Mineral Resources hasn't been immune to these pressures.
But some analysts believe the tide may be turning for the embattled ASX miner. Let's take a look at what the current views are.
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Are Mineral Resources shares undervalued?
The broker community remains divided on Mineral Resources shares, but the overall sentiment is definitely improving.
Citi is the latest broker to revise its rating on the miner, lifting its call from a sell to a hold in a note to clients last week.
It said quality assets lie underneath the embattled company, and despite all the volatility of its shares, they remain in good shape.
Even still, the broker cautions investors on the lingering risks. According to The Australian Financial Review:
We continue to see incremental buyers as limited here with Mineral Resources facing several headwinds including ongoing governance concerns…[and] market uncertainty around the senior leadership team, marginal to loss-making lithium joint venture assets and ongoing internal and external investigations.
So even with a less pessimistic view on Mineral Resources shares, Citi left its price target unchanged at $35 apiece.
Bell Potter is part of the Bullish crowd. It rates the stock a buy, albeit with a trimmed price target of $61, suggesting an impressive upside of 82% over the next 12 months.
Meanwhile, Goldman Sachs joints Citi with a hold rating and a $41 price target.
But Goldman highlighted several "upside risks", including but not limited to, a rebound in lithium prices.
In a cruel torturing of outcomes, the broker also says lithium prices remain a primary concern.
What lies ahead for Mineral Resources?
Bell Potter believes Mineral Resources' Onslow Iron Project could be worth watching, with a ramp-up expected in 2025.
The broker is also optimistic about the company's ability to deleverage its balance sheet, thanks to anticipated capital releases and a strong asset base. That is, pay down debt.
Ultimately, it is lithium and iron ore pricing that will determine the outcome for Mineral Resources. With no certainty on the direction of either, time will tell what is next for the miner.
Takeout
While the road ahead for Mineral Resources shares may still be rocky, opportunities for a turnaround are on the horizon, especially if commodity markets experience another surge.
Until then, sentiment has generally been improving on the stock, but it is not enough to sway the overall opinion. According to CommSec, consensus rates Mineral Resources a hold.
In the last 12 months, the stock is down 47%.
