Update shared on27 Aug 2025
Fair value Increased 13%Despite steady revenue growth and a marginal improvement in net profit margin forecasts, the consensus analyst price target for Mineral Resources has been modestly raised to A$31.07.
What's in the News
- Mineral Resources may sell up to 15% of its mining services business, potentially raising $750 million to $1.1 billion.
- Other possible transactions include further reducing its stake in the Onslow haul road for the Onslow Iron project and selling $789 million in loan receivables or iron ore capacity above 40 million tonnes per year.
- The company's remaining 51% stake in the Onslow haul road likely carries a control premium over the 49% previously sold for $1.3 billion.
- Debt servicing is not currently a concern, with free cashflow expected to cover interest payments threefold in FY2026 and net debt/EBITDA projected to fall to 2.2x next year.
- The business remains viable if iron ore prices stay above USD 61/tonne from FY2027, but debt servicing challenges arise if prices drop below USD 78/tonne.
Valuation Changes
Summary of Valuation Changes for Mineral Resources
- The Consensus Analyst Price Target has risen slightly from A$29.91 to A$31.07.
- The Consensus Revenue Growth forecasts for Mineral Resources remained effectively unchanged, at 4.5% per annum.
- The Net Profit Margin for Mineral Resources remained effectively unchanged, moving only marginally from 9.13% to 9.25%.
Disclaimer
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