The two S&P/ASX 200 Index (ASX: XJO) mining stocks have faced strong headwinds this year from falling lithium prices off the back of oversupply and slower EV demand.
Given that Mineral Resources Ltd (ASX: MIN) is a mining services company and a more diversified resource producer, it has also been affected by lower iron ore prices.
At the time of writing on Friday morning, the Mineral Resources share price is 0.62% higher at $37.10 each. For the year, the share price is down 8.46%.
Meanwhile, the Pilbara Minerals Ltd (ASX: PLS) share price is currently up 3.7% to $2.385 a piece. Over the past six months, the share price has increased 26.05%, but over the year, it has decreased 18.0%.
So, which ASX 200 mining stock is the better buy?
Here's what Macquarie Group Ltd (ASX: MQG) thinks of the two stocks.
Minerals Resources vs Pilbara Minerals shares
In a recent note to investors, the broker confirmed its outperform rating on Pilbara Minerals. It also raised its target price to $2.30, up from $2.20 earlier this week.
That represents a potential 3.5% downside over the next 12 months at the time of writing.
"Incorporating updated commodity prices drives 91%/130% in FY26/27E earnings upgrades. while EPS changes are less than 2% for FY28E and beyond," the broker said in its note.
"Target price is increased by 5% to A$2.30 per share on higher lithium prices. Maintain Outperform."
Macquarie is not so positive on Mineral Resources shares.
In the same note, Macquarie confirmed its underperform rating on Mineral Resources. It also raised its target price to $30, up from $29 previously.
At the time of writing, that represents a potential 19.1% downside for investors over the next 12 months.
" Incorporating higher lithium prices drives material upgrades to earnings outlook. EPS are lifted by 94%/44% for FY26/FY27E, with EPS changes 1-3% for FY28 and beyond," it said.
"Target price is increased by 7% to A$31.00/share on higher lithium prices. Retain Underperform."
What else did Macquarie have to say?
Macquarie has increased its lithium price forecasts for FY26 and FY27, using the Li2Co3 forward curve as a guide "in light of uncertainty and recent volatility". This leads to upwards earnings revisions.
"PLS sees FY26/27 EPS up 91%/>100%, IGO turns profitable in FY26 with FY27 EPS tripling, MIN's FY26/27 EPS rises 94%/44%, and SYA reduces FY26 losses by 44%. LTR sees FY26 EPS up 62% in FY26, and switches from negative to positive earnings in FY27."
It added that near-term spodumene price strength offers upside to its EBITDA and earnings estimates for lithium producers under coverage, but consensus prices are largely in line with the current futures.
"At our previous US$1,200/t blue-sky scenario: PLS's EBITDA could reach A$600m-770m (FY26-28), IGO's EBITDA may rise 50%/25% to A$210m/A$120m (FY26/27). LTR could achieve A$180m-440m EBITDA (FY26-28) at US$1,200/t, and SYA would also return to profitability," the broker said.
