Management has guided to an increase in lithium DSO shipments and guidance for FY19 is also higher than Macquarie expected.
Crushing capacity is expected to grow by a further 15-20mt in FY18. Macquarie is encouraged by the upgrade which should alleviate concerns over the acceptance of the DSO product in the market, and further growth in crushing capacity presents material upside risks to its base case earnings.
Outperform rating retained. Target is $23.
Target price is $23.00.Current Price is $18.75. Difference: $4.25 – (brackets indicate current price is over target). If MIN meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).