The Mineral Resources share price is down 72% in a year. Time to pounce?

Two top experts ran their slide rules over Mineral Resources shares. Here's what they found.

| More on:
Two mining workers on a laptop at a mine site.

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 giving back some of yesterday's outsized gains today.

Shares in the S&P/ASX 200 Index (ASX: XJO) lithium miner and diversified resources producer closed up 13.2% yesterday trading for $20.57. That strong run followed the release of the miner's third quarter activities results.

In morning trade on Wednesday, there looks to be some profit-taking going on with shares changing hands for $20.34 apiece, down 1.1%.

For some context, the ASX 200 is up 0.3% at this same time.

With the Mineral Resources share price catching headwinds this past year from both a slumping iron ore price and a global lithium oversupply, shares in the ASX 200 miner are down a painful 71.8% over 12 months.

Does that now make the stock a long-term bargain, or is it still in the 'falling knife' stage?

Below we look at both the bull and bear case for the beaten down miner.

Why the Mineral Resources share price could keep falling

Starting with the bears, Red Leaf Securities' John Athanasiou believes the Mineral Resources share price is more of a falling knife than a screaming bargain (courtesy of The Bull).

"Mineral Resources is a leading diversified resources company, with extensive operations in lithium, iron ore, energy and mining services across Western Australia," said Athanasiou, who has a sell recommendation on the miner.

"MIN's outlook is challenged by falling iron ore and lithium prices," he explained.

As for the company's disappointing half-year results that have pressured the Mineral Resources share price, Athanasiou said:

The company reported an underlying net loss after tax of $196 million from continuing operations in the first half of fiscal year 2025, down 200% on the prior corresponding period. The company didn't declare an interim dividend.

Athanasiou also flagged concerns over the company's corporate governance issues, noting:

The recent and sudden resignations of two non-executive directors have raised corporate governance concerns among investors. The share price has been smashed in the past 12 months.

And with net debt at the end of 3Q FY 2025 of $5.4 billion, Athanasiou concluded, "Also, high debt levels amid declining investor confidence skews the risk/reward to the downside, in our view."

The bull case for the ASX 200 miner

The analysts over at Macquarie Group Ltd (ASX: MQG) have a decidedly more optimistic outlook for Mineral Resources.

Following on the miner's third-quarter update yesterday, Macquarie noted:

MIN's 3QFY25 was on balance a good result, with Onslow shipments (-6%) lower vs VA consensus, but in line with MQe.

Mount Marion increased 20% to 185-200kt, a positive, while Onslow downgrade was already anticipated by the market, thus not a surprise.

Macquarie has an outperform rating on the miner and a $35.00 12-month target for the Mineral Resources share price. That represents a potential upside of 72% from current levels.

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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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

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

Why did the Mineral Resources share price rip 15% higher today?

The iron ore and lithium giant was the fastest riser of the ASX 200 on Thursday.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares?

BHP is expanding its iron ore and copper production.

Read more »

An engineer takes a break on a staircase and looks out over a huge open pit coal mine as the sun rises in the background.
Resources Shares

4 reasons to buy BHP shares today

A leading expert outlines four key reasons BHP shares are a buy.

Read more »

Businessman walks through exit door signalling resignation
Resources Shares

Pilbara Minerals share price drops as CFO announces resignation

It’s been a challenging few years for outgoing Pilbara Minerals CFO Luke Bortoli.

Read more »

Miner looking at a tablet.
Resources Shares

What happened with the BHP share price in May?

Did you buy BHP shares in May? Here’s how much the ASX 200 miner returned.

Read more »

Two men in hard hats and high visibility jackets look together at a laptop screen at a mine site.
Resources Shares

Should I buy Fortescue shares today?

A leading investing expert offers his verdict on the outlook for Fortescue shares.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Resources Shares

Is this a good time to buy BHP shares?

Should investors jump on the ASX mining shares right now?

Read more »

a miner holds his thumb up as he holds a device in his other hand.
Broker Notes

Why Macquarie expects this ASX 200 copper stock to surge 36% in a year

Macquarie forecasts some hefty gains ahead for the ASX 200 copper miner. But why?

Read more »