The production reporting season is in full swing, and with it comes the chance for analysts to reassess how the major mining companies are faring.
The team at Macquarie have issued a slew of reports this week. I've selected reports looking at three companies that they believe will strongly outperform the market.
Let's see who they like.
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Mineral Resources Ltd (ASX: MIN)
MinRes this week reported that they had produced 341 million tonnes of ore in mining services for the full year, up 22% year on year and above the company's upgraded guidance range of 320 to 330 million tonnes.
The company's Onslow iron ore division shipped a record 9.6 million tonnes in the fourth quarter, bringing full-year shipments to 19.7 million tonnes, again exceeding guidance.
Meanwhile, the company's lithium sales were a record 158,000 tonnes for the quarter at a price of US$2425 per tonne, up 15% quarter on quarter.
The Macquarie team were impressed with the results, saying:
The result beat our optimistic expectations going into the result, with all assets performing well. The focus remains on execution of Onslow's growth, continuing the deleveraging cycle and potential capital returns.
Macquarie has an unchanged price target of $85 on MinRes shares compared to $55.62 at the time of writing.
Nickel Industries Ltd (ASX: NIC)
Nickel Industries this week reported ore production in its mining operations, up a modest 4% to 3.96 million tonnes, but EBITDA was up an impressive 58% quarter on quarter to US$45.7 million.
Earnings in its two other divisions fell, but both remained positive.
Managing Director Justin Werner said regarding the results:
The June quarter marked the beginning of a transformational period for Nickel Industries, with first mixed hydroxide precipitate produced in July and the first nickel cathode expected by mid-August – a landmark moment that will see the Company producing across the full nickel value chain, from our own ore through to exchange-grade cathode.
Macquarie said the first mixed hydroxide precipitate production was "a key step in NIC's move downstream into the EV battery supply chain".
Macquarie has a price target of $1.25 on Nickel Industries shares compared to 78.5 cents at the time of writing.
Liontown Ltd (ASX: LTR)
Macquarie said Liontown's production of 103,000 tonnes of spodumene concentrate was broadly in line with consensus estimates and up 7% quarter on quarter.
There were some negatives in the company's production report, as the Macquarie team said:
Despite production guidance meeting expectations, unit costs of $1,050-$1,250/ t are more than 10% above Visible Alpha, while total capex guidance of $320-$370m is 56% above market expectations at the midpoint.
Macquarie reduced its price target on Liontown from $2.30 to $1.70 "on weakened near term earnings outlook and lower valuation for the Kathleen Valley project''.
This is still well above the share price of $1 at the time of writing.
