Mineral Resources lifts after Morgans raises target
Make us a preferred source
Make us a preferred source on Google
The news: Mineral Resources shares have recovered slightly after the company downgraded its volume guidance for the Onslow Iron project on Tuesday, even as wealth management firm Morgans raised its price target and maintained an ‘add’ rating.
The numbers: Mineral Resources shares spiked at open before falling to $22.51 — still 0.27% higher than the previous close — at 11:07am AEST. Morgans lifted its price target from $23 to $26 on Wednesday.
The context: The miner lowered volume guidance to between 7.8 million and 8 million tonnes, down from the previous range of 8.5 million to 8.7 million tonnes, due to haulage constraints.
Morgans analyst Annabelle Sleeman said that while the company is currently using contractors for haulage, she does not view this as a major issue “given there is only about one month left in FY25 and we don’t expect this to impact haulage at Onslow long term given contractors are only expected to be used for a maximum of three more months if ramp-up is completed by the September quarter 2025”.
Although maintaining an ‘add’ rating — which implies a potential upside of 10% or more — Sleeman noted the investment remains high risk, citing elevated debt levels and her bearish outlook on the lithium market.
There is, however, potential upside if Mineral Resources can execute on its Onslow iron ore project over the next four months, as the project has been a key driver of recent share price performance.
The source: Morgans research
