The Mineral Resources Ltd (ASX: MIN) share price is having a tough time on Wednesday.
At the time of writing, the mining and mining services company's shares are down almost 5% to a 52-week low of $51.95.
This means they have lost over a third of their value since peaking at a 52-week high of $79.76 in May.
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Why is the Mineral Resources share price at a 52-week low?
Investors have been selling down the company's shares in response to falling iron ore and lithium prices.
This appears to have left investors concerned that Mineral Resources could be about to have its profits squeezed in FY 2025, and have been heading to the exits in a hurry.
Is this a buying opportunity? Let's see what one leading broker is saying about the Mineral Resources share price.
Is this a buying opportunity?
The team at Goldman Sachs thinks investors should be keeping their powder dry for the time being.
A recent note out of the investment bank reveals that its analysts have put a sell rating and $47.00 price target on the company's shares. This implies potential downside of approximately 10% for the Mineral Resources share price from current levels.
Goldman believes its shares are fully valued and there are better options out there for investors to choose from in the mining sector. It said:
Fully valued vs. peers and downside to PT: trading at ~1.35xNAV (A$54.6/sh) based on our volume and operating assumptions and long-run price assumptions. MIN is pricing in long-run commodity prices ~20% higher than our estimates. MIN is also trading at ~17x NTM EBITDA (vs. Aus lithium peers on ~8.0x and large cap iron ore peers on ~5x) and ~7x FY26E.
In addition, it is forecasting the miner to be generating negative free cash flow in the near term. It adds:
Positive medium-term volume growth but low/negative FCF across FY24E & FY25E: we still forecast a more than doubling of group lithium volumes (spodumene) to ~120ktpa of LCE, growth in equity iron ore volumes to >20Mtpa, and >40% increase in mining services volumes (mostly from internal projects) to >380Mtpa.
However, due to a step-up in growth capex at Ashburton, and our below consensus lithium price forecasts, we forecast low/negative FCF across FY24-25 and a FCF yield of -19%/-4% (-18%/+1% at spot) over these years. We would expect this to improve however if the 49% sell down of the Onslow haul road down completes.
In light of the above, instead of buying Mineral Resources, here are three ASX 200 mining stocks that the broker has just put buy ratings on.
