The Mineral Resources Limited (ASX: MIN) share price has been a strong performer over the last couple of months.
During this time, the mining and mining services company's shares have risen an impressive 28% to $58.71.
This has been driven largely by its exposure to lithium, which continues to command sky high prices thanks to its use in electric vehicles and renewable energy.
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Can the Mineral Resources share price keep rising?
According to a note out of Goldman Sachs, its analysts believe the Mineral Resources share price can rise further from current levels.
The note reveals that its analysts have retained their buy rating with an improved price target of $69.50.
Based on the current Mineral Resources share price, this implies potential upside of just over 18% for investors over the next 12 months.
In addition, the broker is forecasting a ~3% dividend yield in FY 2023, which stretches the total potential return to approximately 21%.
What did Goldman say?
Although Goldman Sachs wasn't blown away by either Mineral Resources' FY 2022 results or its FY 2023 guidance, it remains positive due to stronger than expected lithium prices. It commented:
MIN reported FY22 underlying EBITDA/NPAT of A$1,024mn/A$400mn,-6%/-15% below GSe and VA consensus on lower than expected earnings from iron ore and mining services. […] Guidance for FY23 was slightly negative vs GSe, with higher costs at the iron ore and Wodgina lithium, and ~A$0.5bn higher capex on a short construction timeframe for Ashburton, and flat mining services volumes.
We increase our FY23-25 EPS by -10%/+9%/+39% with higher iron ore and lithium costs in FY23 partly offset by MtM of our Sep Q lithium price forecasts, and InfraCo capital charges lifting outer-year earnings.
Overall, the broker expects a huge profit jump in FY 2023 thanks largely to the company's lithium operations. It explained:
We forecast a more than doubling of group EBITDA to over A$2.3bn in FY23 driven by higher lithium volumes (LiOH & spod), tailwinds from M-3 lithium pricing lags, and an improvement in low grade iron ore price realisations.
