MinRes rallies with analysts mixed on Chris Ellison exit
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The news: Mineral Resources shares rallied on the ASX after the mining group announced that its managing director Chris Ellison and chair James McClements will transition from their roles following its investigation into tax evasion allegations.
The numbers: MinRes shares climbed 2.8% to $27.74 by 11:15am AEDT.
The stock fell 9.6% on Monday on news that Ellison will step down from his role within the next 12 to 18 months and incur financial penalties.
The context: Bell Potter analyst Bradley Watson expects ongoing volatility in MinRes' share price "for some time" as ongoing investigations could confirm further allegations against Ellison, or implicate other executives. He also noted that the leadership transition is relatively long dated, and that some investors will be unhappy at the loss of Ellison's leadership.
However, Bell Potter kept its 'buy' rating and $61.50 target price on MinRes. Watson said the company continues to be an "attractive investment", with positive catalysts including the ramp-up of its Onslow iron project in 2025.
Citi was less positive on MinRes' leadership transition, downgrading the company from 'neutral' to 'sell' and slashing its target price from $50 to $35. Citi's analysts noted that the slow pace of change will likely weigh on the stock.
The sources: Bell Potter research, Citi research
