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MIN: Higher Margins And Asset Sale Will Drive Stronger Future Upside

Global Electrification Will Drive Demand For Iron Ore And Lithium

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MIN
AnalystHighTarget
Not Invested
Published 30 Jun 2025
23 viewsusers have viewed this narrative update

Update shared on 20 Dec 2025

Fair value Increased 26%
Next
18 Feb
AU$65.19
AnalystHighTarget's Fair Value
AU$75.00
13.1% undervalued intrinsic discount
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1Y
175.1%
7D
-8.4%

Analysts have lifted their price target for Mineral Resources from 54.04 dollars to 68.00 dollars, citing expectations of structurally higher profit margins despite moderating revenue growth assumptions and a slightly increased discount rate.

What's in the News

  • Mineral Resources has reportedly launched a sale process for its Bald Hill lithium mine, aiming to secure funds to pay down debt through either a full or partial stake sale (Key Developments)
  • Investment banks Standard Chartered and Argonaut Securities are running the Bald Hill sale process, while JPMorgan continues to advise Mineral Resources more broadly on strategic options (Key Developments)
  • Potential bidders are expected to include downstream battery and chemical producers such as LG Chemical and Mitsubishi. These companies are seen as well placed to acquire a stake in the Bald Hill asset (Key Developments)
  • The Bald Hill mine remains in care and maintenance after a period of weak lithium prices. This follows earlier but unsuccessful efforts to sell stakes in other assets such as the Wodgina mine at the company’s desired valuation (Key Developments)
  • Pressure to divest assets has eased somewhat following a rebound in lithium and iron ore prices, despite the company having previously reported a substantial annual loss and elevated net debt (Key Developments)

Valuation Changes

  • The fair value estimate has risen significantly from A$54.04 to A$68.00 per share, reflecting a more optimistic assessment of Mineral Resources intrinsic worth.
  • The discount rate has increased slightly from 8.48 percent to 8.85 percent, indicating a modestly higher assumed risk profile or required return.
  • Revenue growth has been revised down materially from 30.35 percent to 15.34 percent, suggesting more conservative expectations for top line expansion.
  • The net profit margin has increased sharply from 7.23 percent to 16.55 percent, implying expectations of substantially stronger profitability despite slower revenue growth.
  • The future P/E has decreased moderately from 18.87x to 15.14x, indicating a lower assumed earnings multiple in the updated valuation framework.

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