The significant rise in Mineral Resources' future P/E ratio alongside a marked decline in net profit margin indicates weaker earnings expectations, prompting analysts to reduce their consensus price target from A$29.30 to A$27.10.
What's in the News
- Mineral Resources Limited is considering selling a 10-15% stake in its mining services business, potentially raising $750 million to $1.1 billion, to boost cash reserves.
- The company may sell a further stake in the Onslow haul road, with its remaining 51% stake valued higher than the previous sale of 49% for $1.3 billion due to the control premium.
- Additional options include selling $789 million in Onslow Iron loan receivables or excess iron ore capacity above 40 million tonnes annually.
- Morgan Stanley analysts project improved debt servicing, with free cash flow covering interest payments three times in FY26 and net debt to EBITDA expected to drop from 6.2x to 2.2x.
- An undisclosed buyer acquired an unspecified stake in Mineral Resources Limited from HESTA managed by H.E.S.T. Australia Ltd.
Valuation Changes
Summary of Valuation Changes for Mineral Resources
- The Consensus Analyst Price Target has fallen from A$29.30 to A$27.10.
- The Future P/E for Mineral Resources has significantly risen from 8.86x to 13.03x.
- The Net Profit Margin for Mineral Resources has significantly fallen from 15.48% to 9.19%.
Disclaimer
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