27% upside and 5 other reasons to buy this ASX 200 lithium share: top brokers

Let's check the outlook for this diversified mining company.

| More on:
Man standing in a mine with mining vehicles.

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

Key points

  • The Mineral Resources share price has dropped around 5% year to date
  • But brokers have a positive view on the company
  • Analysts like its exposure to multiple commodities, including iron ore and lithium 

ASX 200 lithium share Mineral Resources Ltd (ASX: MIN) has fallen in the year to date, so is now the time to buy?

The company's share price has slid nearly 5% from $77.20 at market close on 30 December to $73.28 at the closing bell on Friday.

Let's check the outlook for this ASX 200 lithium share.

Is Mineral Resources a buy?

Mineral Resources is not just an ASX 200 lithium share. The company also has iron ore and energy operations in Western Australia.

Analysts at Morgans have placed an add rating and a $93 price target on the company. This implies an upside of 27% based on the latest closing price.

Commenting on the outlook for Mineral Resources, Morgans said:

We see MIN's lithium and iron ore market exposures as an ideal combination to benefit from the China re-opening increase in demand during 1H CY23.

We also see MIN as well placed to grow into its valuation, even if we see unexpected metal price volatility, given the magnitude of organic growth in the pipeline.

The broker noted Mineral Resources is a "founder-led business and top tier miner and crusher" that has "grown consistently" despite barely issuing a share in the last decade. Billionaire Chris Ellison founded Mineral Resources and remains the company's managing director.

The team at Morgans added:

Also helping our investment view is that MIN's diversification leaves it far more capable of tolerating volatility in lithium markets than its peers in the sector. 

Mineral Resources is also a buy recommendation in the eyes of Fairmont Equities managing director Michael Gable.

Gable noted weak iron ore and lithium prices contributed to Mineral Resources shares falling from late January to early June, but now these commodities are recovering.

Commenting on Mineral Resources, he said:

Recently, lithium and iron ore prices appear to be finding support.

The share price of this diversified resources company is also bottoming on the chart. Mineral Resources is potentially a good entry point around recent levels

Meanwhile, on Friday, Mineral Resources provided an exploration and lithium update. The company has found a "significant natural gas discovery" at North Erregulla Deep-1.

The company also advised early results at the Mt Marion lithium mine confirm "significant exploration potential".

Share price snapshot

The Mineral Resources share price has soared 37% in the past year.

Created with Highcharts 11.4.3Mineral Resources PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

This ASX 200 lithium share has a market capitalisation of about $14.2 billion based on the latest share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Resources Shares

Miner looking at a tablet.
Resources Shares

Does Wilson Asset Management prefer Rio Tinto or BHP shares?

Which miner is in favour?

Read more »

Two smiling men in high visibility vests and yellow hardhats stand side by side with a large mound of earth and mining equipment behind them smiling as the Carnaby Resources share price rises today
Resources Shares

Macquarie tips this ASX 200 resources stock to soar nearly 40%

Big returns could be on offer here according to the broker.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Resources Shares

Bell Potter says this ASX 200 mining stock can rise ~30%

Let's see why this miner could be destined to deliver big returns over the next 12 months.

Read more »

Man with rocket wings which have flames coming out of them.
Resources Shares

Up 23% today, why Macquarie forecasts this ASX 200 mining stock could rocket another 33%

Macquarie forecasts more outsized gains to come for this surging ASX 200 mining stock.

Read more »

Three mining workers stand proudly in front of a mine smiling because the BHP share price is rising
Resources Shares

Forget gold! This metal just hit record highs and ASX 200 miner BHP is betting big

Let’s find out why.

Read more »

Three miners looking at a tablet.
Broker Notes

Does Macquarie prefer Rio Tinto, Fortescue or BHP shares heading into 2026?

BHP, Rio Tinto, or Fortescue? Macquarie only expects one of the three ASX mining stocks to outperform.

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Resources Shares

3 reasons why the Mineral Resources share price is primed to rebound

Can the troubled miner get out of its hole?

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

4 reasons to buy this surging ASX All Ords mining stock today

A leading wealth manager expects more outperformance from this surging ASX All Ords miner.

Read more »