UBS has upgraded its rating for Mineral Resources (MinRes) to “buy,” setting a revised price target of $28.60. This target suggests a potential upside of approximately 20% from the company’s current trading levels. The upgrade reflects UBS’s assessment that MinRes shares are currently undervalued, particularly considering prevailing prices for iron ore and spodumene, key commodities for the company.
While acknowledging lingering governance concerns related to founder Chris Ellison, UBS stated that MinRes has taken sufficient steps to address these issues. The broker’s analysis indicates that MinRes’s current share price reflects assumptions of $US80 per tonne for iron ore and $US1300 per tonne for spodumene. However, UBS believes that if spot prices hold, the fair value of MinRes shares could reach $32.30. The market responded positively to the upgrade, with MinRes shares rallying 7.5% to $23.60 in Monday morning trading, signaling investor confidence in the revised outlook.
