Top broker forecasts Mineral Resources share price could soar another 30%

Up 25% in two days, this leading broker thinks Mineral Resources shares have a lot more to give.

| More on:
A man in a hard hat and high visibility vest holds his thumb up in a gesture of confidence with heavy moving equipment in the background as on a mine site as the Chalice Mining share price rises today.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Mineral Resources Ltd (ASX: MIN) share price is rocketing higher again today.

Shares in the beaten-down and heavily shorted S&P/ASX 200 Index (ASX: XJO) lithium miner and diversified resources producer closed up 16.0% yesterday at $4.83. In late morning trade today, shares are changing hands for $38.34, up 9.2%.

For some context, the ASX 200 is up 0.6% today.

Despite the strong two-day rally, the Mineral Resources share price remains down almost 46% in 2024.

But the ASX 200 mining stock could be poised to recoup a lot more of those losses, handing some potentially outsized gains to investors buying the stock today.

That's according to JP Morgan (courtesy of The Australian).

The broker just raised Mineral Resources to an overweight rating with a $50 price target on its shares. That represents a potential gain of more than 30% from current levels.

What's been boosting the Mineral Resources share price?

The ASX 200 miner got a big boost yesterday on two fronts, with at least one of those tailwinds continuing to buoy the stock today.

On Wednesday, the Mineral Resources share price rocketed higher after the company reported that it had received unconditional approval from the Australian Foreign Investment Review Board (FIRB) to sell its 49% stake in the Onslow Iron haul road project.

Morgan Stanley Infrastructure Partners will shell out some $1.3 billion for the asset, consisting of $1.1 billion in cash and a conditional deferred cash amount of $200 million.

Management expects that the haul road will be completed in October.

Mineral Resources said it will use the proceeds to cancel its US$750 million undrawn bridge facility.

Also likely spurring investor interest, management said the Onslow Iron project will be cash flow positive commencing next month at current iron ore prices. That project is still ramping up to full production.

How about lithium?

Slumping lithium prices and a gloomy outlook for any near-term recovery have been among the bigger drags on the Mineral Resources share price for most of the year.

But that turned around yesterday, with enthusiasm for ASX lithium stocks continuing today.

Why?

As the Motley Fool reported here yesterday:

Reports are circulating that a Chinese electric vehicle battery manufacturer, CATL, has suspended production at two of its lepidolite lithium mines.

If this proves to be the case, the closure of Chinese lithium mines would be good news for ASX lithium shares, as it would probably result in a reduction in supply and subsequently push up prices.

Indeed, if Citi's revised lithium price forecast proves correct, the Mineral Resources share price should enjoy further support heading into 2025.

"We expect investors, both inside and outside of China, to cover their shorts over the coming weeks on the back of recent supply curtailments from CATL's lepidolite cuts, inventory drawdowns, and seasonal peak demand," Citi analyst Kate McCutcheon said (quoted by The Australian).

The broker forecasts lithium prices will increase 20% to 25% over the next three months. Citi raised its three-month price target for lithium carbonate to US$14,000.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 5 December 2024

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended JPMorgan Chase. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX lithium stock just rocketed 37%

The ASX lithium stock is now up a whopping 131% in one week.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Materials Shares

Buy BHP shares for a 20% annual return

Goldman Sachs thinks that the mining giant's shares could be undervalued at current levels.

Read more »

A young man goes over his finances and investment portfolio at home.
Materials Shares

How did the Pilbara Minerals share price perform in November?

How did this lithium miner perform during the month? Let's find out.

Read more »

A young man wearing a black and white striped t-shirt looks surprised.
Materials Shares

Guess which small-cap ASX mining stock just surged 38% on a 'significant milestone'

Let's see why investors are fighting to get hold of this share on Friday.

Read more »

Miner looking at a tablet.
Materials Shares

ASX lithium shares like Mineral Resources thrown $150 million government lifeline

Lithium miners in WA can breathe a bit easier amid a new funding announcement.

Read more »

A woman with a sad face stands under a shredded umbrella in a grey thunderstorm
Materials Shares

Sell this ASX 200 lithium stock now amid a 'cloudy outlook'

The ASX 200 lithium producer could have further to fall in 2025.

Read more »

Miner looking at a tablet.
Materials Shares

Why today is a big day for Core Lithium shares

Why is everyone talking about Core Lithium shares today?

Read more »

An unhappy investor holding his eyes while watching a falling ASX share price on a computer screen.
Materials Shares

This ASX All Ords stock just crashed 22%. Here's why

Let's see why this stock is having a bad day after returning from a trading halt.

Read more »