Now could be a good time to buy Develop Global Ltd (ASX: DVP) shares.
That's the view of analysts at Bell Potter, which have just boosted their valuation of the ASX mining stock materially.
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What is the broker saying about this ASX mining stock?
According to the note, the broker has been looking at recent developments and was pleased with what it saw. This includes the release of an update on the Woodlawn copper, zinc, and lead project, which is performing better than expected. It said:
Woodlawn plant commissioning and underground mine production ramp-up is progressing ahead of our expectations. Commissioning rates of 750ktpa have been achieved (~90% of nameplate capacity), with processing parameters being optimised before final ramp-up to nameplate rates. We have brought forward nameplate concentrate production rates one quarter to the September 2025 quarter.
Metal recoveries are tracking to company expectations and underground mining rates are on-track to hit >800ktpa by the December 2025 quarter. First copper, zinc and lead concentrate parcels have been shipped, with initial payment received from Trafigura for the copper concentrate shipment.
It was also pleased with its update on the Sulphur Springs development. The broker adds:
Substantial earthwork activities have commenced, with box cut excavation expected to complete in the September 2025 quarter. DMS will then commence works to develop a major decline to the bottom of the endowment. An updated DFS is scheduled to be completed by the December 2025 quarter, outlining updated operating parameters for the project.
Time to buy
In response to the above, the broker has boosted its earnings estimates. It explains:
Reflect a quicker production ramp-up at Woodlawn and a deferral of Pioneer Dome production: FY25 nc; FY26 +17%; and FY27 -6%. Our valuation lifts after applying a lower WACC of 9.5% (previously 10.5%) and following a roll-forward of our asset DCF models and net debt.
Bell Potter has retained its buy rating on the ASX mining stock with an increased price target of $5.00 (from $4.00). Based on its current share price of $4.23, this implies potential upside of 18% for investors over the next 12 months. It then concludes:
DVP has demonstrated impressive execution of workflows to date to enable a timely and within-budget restart of operations at its flagship Woodlawn operation. We expect the successful ramp-up of Woodlawn production by 1H FY26 to drive a transformation in the company's EPS outlook in FY26.
