Rio Tinto Ltd (ASX: RIO) shares have enjoyed a good run recently and are up approximately 15% year to date thanks partly to the booming copper price.
But with the mining giant already trading strongly, investors looking for bigger upside in the copper space may want to look further down the market cap spectrum.
According to Bell Potter, Aeris Resources Ltd (ASX: AIS) shares could offer significantly more upside from current levels. Here's why.
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What is the broker saying?
Bell Potter believes this ASX copper stock has made a value-accretive move with its proposed acquisition of Peel Mining via an all-scrip deal. The broker said:
AIS has made what we believe is a value accretive, strategic acquisition that bolsters and de-risks the long-term production outlook for its Tritton Copper Mine in NSW. We see potential for an extended mine life of +10 years and sustainable production rates of ~30ktpa copper in concentrate.
Under the deal, Aeris will acquire the Mallee Bull and Wirlong copper projects, which sit within trucking distance of Tritton. Bell Potter explains:
The primary assets of PEX are the Mallee Bull and Wirlong copper projects which contain a combined Resource of 10.6Mt @ 1.85% Cu for 197kt contained Cu. They sit within a ~150-200km trucking radius of Tritton. Combined with the current Resource at Tritton this is a total Resource of 29.5 Mt @ 1.73% Cu for 511kt contained Cu.
The broker believes this could extend Tritton's mine life beyond 10 years, improve operating flexibility, and allow full utilisation of the processing plant.
Value accretive deal
On its modelling, Bell Potter sees meaningful value uplift from the acquisition. The broker said:
This adds ~$350m to our NPV for Tritton, which we risk adjust 15% lower to $300m… On our assumptions, this shows the acquisition to be strongly value accretive compared with the $170m value of AIS' scrip consideration for PEX.
Importantly, the acquisition strengthens Aeris' position in the Cobar Basin, which Bell Potter believes enhances its strategic regional footprint.
Earnings upgrades
Bell Potter has also upgraded its forecasts in response to the deal and updated commodity assumptions. The broker noted:
EPS changes in this report are: FY26: +9%, FY27: +12% and FY28: +27% on higher copper price forecasts. AIS is a copper-dominant producer, with its near-term outlook highly leveraged to the copper price, increasing production at Tritton and gold production at Cracow.
The broker's earnings estimates show strong forecast growth, with EBITDA expected to rise from $160 million in FY 2025 to $310 million in FY 2026 and then $404 million in FY 2027.
Time to buy this ASX copper stock
According to the note, Bell Potter has maintained its buy recommendation and lifted its price target to $0.90 (from $0.82).
Based on its current share price of 51 cents, this implies potential upside of 76% for investors over the next 12 months.
