If you are looking for exposure to the mining sector, then Bell Potter has your back.
The broker has just named an ASX mining stock that is "ready to rip" as a buy.
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Which ASX mining stock?
Bell Potter is bullish on Nickel Industries Ltd (ASX: NIC) and believes its shares could rise strongly from current levels.
It is a vertically integrated nickel producer with production assets spanning nickel ore mining, nickel pig iron (NPI) production and nickel mixed hydroxide precipitate (MHP) production.
This is achieved through several rotary kiln electric furnace (RKEF) processing lines across two industrial parks in Indonesia.
What is the broker saying?
Bell Potter was pleased with Nickel Industries' performance in FY 2025. It notes that its revenue and EBITDA were in line with expectations.
NIC has released its CY25 financial result which was in-line with our revenue and EBITDA forecasts, but below our earnings forecast on higher D&A charges, taxes, financing costs and an impairment. Key metrics from the result included: revenue US$1,649m vs BPe US$1,601m, EBITDA (underlying): US$283m vs BPe US$278m, NPAT (reported, consolidated) US$41m loss vs BPe US$31m profit. No dividend was declared, as expected.
But the main reason that Bell Potter is bullish on this ASX mining stock is its "exceptional nickel price" leverage. The broker believes that its strong margins mean it will benefit greatly when nickel prices move from cyclical lows. It adds:
While technically a miss at the NPAT line, we view the result as a positive one that continues to demonstrate the fundamental strength and profitability of NIC's vertically integrated business model. Underlying EBITDA of US$283m equates to a 17% EBITDA margin through one of the toughest nickel price cycles in years. Margins have been maintained through a combination of cost control and production growth.
This places NIC in a position of exceptional leverage to the nickel price in the event of its recovery off cyclical lows. The industry has seen the closure or suspension of projects globally, tightening any potential supply response. Recently announced production restrictions by the Indonesian Government have been the catalyst for a rise in the nickel price, which we expect to be a positive price support in CY26.
Big returns could be on the cards
According to the note, the broker has retained its buy rating on the ASX mining stock with an improved price target of $1.45 (from $1.30).
Based on its current share price of $1.01, this implies potential upside of approximately 44% for investors over the next 12 months.
In addition, the broker is forecasting a 4% dividend yield over the period, boosting the total potential return to almost 50%.
Commenting on the investment opportunity here, Bell Potter said:
NIC is one of the world's largest listed nickel producers and offers exposure across a range of nickel products and markets. It continues to make money through low nickel prices, benefitting from its upstream and downstream operations, diversified risk and margin exposure across an integrated value chain. We retain our Buy recommendation on an increased Target Price of $1.45/sh.
