Fortescue Ltd (ASX: FMG) shares are a popular option for Aussie investors looking for mining sector exposure.
But just because it's popular doesn't necessarily mean it is a good investment.
For example, Bell Potter thinks investors should be selling Fortescue's shares. It has a sell rating and $17.05 price target on them, which implies potential downside of 11% from current levels. The broker recently said:
FMG's core iron ore operations have outperformed and are on track to sustain these levels into FY26. However, we still forecast a lower iron ore price and declining earnings and dividends. Our NPV-based target price is lowered 2%, to $17.05/sh. With a TSR of – 6% from FMG's last closing price, we downgrade our recommendation to Sell.
Instead of Fortescue, the broker believes that another ASX mining stock would be a better buy.
Which ASX mining stock?
The stock that Bell Potter is tipping as a buy today is Develop Global Ltd (ASX: DVP).
It notes that it operates under a hybrid model as an underground mining contractor and operator of two mining assets: the Woodlawn Zinc-Copper Mine and the Sulphur Springs Zinc-Copper Project.
The broker points out that the company has released its FY 2025 update this week and delivered a result a touch softer than expected. It said:
DVP reported revenue of $231m (BPe $235m), up 57% YoY, underlying EBITDA of $25.4m (BPe $46.1m), up 99% YoY, underlying EBIT of -$3.4m (BPe $15.2m), up from -$9.5m in the PcP, and underlying NPAT of -$5.2m (BPe $7.0m), up from -$12.0m in the PcP. The weaker than expected financials were driven by lower cost capitalisation (resulting in higher COGS) during Woodlawn production ramp-up and higher share-based payments in 2H FY25 of $13.4m (BPe $3.5m). DVP reported inaugural revenue relating to its Woodlawn concentrate sales of $8.6m for copper concentrate, $2.5m for lead concentrate and $3.5m for zinc concentrate.
Nevertheless, it remains very positive and is urging investors to snap up this ASX mining stock while it is cheap.
According to the note, Bell Potter has retained its buy rating on Develop Global's shares with a trimmed price target of $5.10 (from $5.30). Based on its current share price of $4.31, this implies potential upside of 18% for investors over the next 12 months.
Bell Potter likes the company due to its exposure to copper and a number of catalysts. Commenting on its buy recommendation, the broker said:
With Woodlawn production approaching nameplate capacity by the March 2026 quarter, commercial derisking is in focus with an emphasis on cash flow generation and profitability. Upcoming catalysts should maintain the momentum in DVP's share price. DVP offers investors leveraged exposure to near term copper price upside with meaningful exposure to zinc and precious metals.
Upcoming catalysts include: Updated Sulphur Springs DFS (expected in the Dec'25 quarter); Sulphur Springs project FID and finalisation of financing and offtake arrangements (2H FY26); exploration updates from drilling programs at Woodlawn and Sulphur Springs (over CY26); and the outcome from the Woodlawn mill expansion investigation.
