MIN – UBS rates the stock as Neutral

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Fortescue (FMG) will temporarily step in to manage the iron ore processing plant at Christmas Creek. Mineral Resources does not expect material earnings or cash flow impact as Fortescue will continue to pay for the tonnes produced less any costs incurred.

UBS still thinks Mineral Resources is a better way to leverage iron ore as it has a greater leverage to volumes against price. Also its own iron ore operations provide a flexible way to leverage sustained changes to the iron ore price. Having said that, the broker thinks this is reflected in the share price and the $10.70 price target is maintained. The Neutral rating is retained.

Sector: Commercial Services & Supplies.

Target price is $10.70.Current Price is $10.95. Difference: ($0.25) – (brackets indicate current price is over target). If MIN meets the UBS target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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