Mineral Resources Broker Ratings Oct-23

Macquarie – Macquarie noted that the Q1 results from Mineral Resources were a bit “underwhelming”, with both iron ore and lithium sales volumes not meeting expectations. The broker mentioned that lithium shipments faced disruptions due to port closures. However, the achieved prices matched what was anticipated. Short-term predictions have been lowered. The price target has been adjusted to $83, down from $84. Nonetheless, the “Outperform” rating remains unchanged.

UBS – The September-quarter update from Mineral Resources had a mixed bag of results; while iron ore production exceeded expectations, lithium didn’t quite hit the mark. The management has reiterated its guidance. The broker pointed out that even though iron ore production was robust, the shipments didn’t fare as well. UBS has revised its predictions to account for the softer spodumene and lithium prices, increased expenses, and a slow-paced ramp-up at Mt Marion. Projected EPS is expected to drop by 13% in FY24, 10% in FY25, and 4% in FY26.

Morgan Stanley – In comparison to the general expectations for the 1Q, prices and sales at the Mt Marion operations for Mineral Resources fell short by 12% and 9%, respectively. Production matched Morgan Stanley’s predictions but was 5% below the general consensus. On a brighter note, iron ore production surpassed both the analysts’ and consensus estimates by 7% and 8%, respectively. However, the revenue from Mining Services was a tad below what the broker had expected. Morgan Stanley observes potential challenges in the lithium sector given the current climate and highlights that the company’s overall financial leverage is quite high.