UBS expects the Mineral Resources’ mining services business to grow to circa 860mt contract tonnes by end of 2022 from 429mt in 2019 led by growth in internal and external business.
On the flip side, the broker believes Mineral Resources is unlikely to deliver lower operating expense in FY21 versus FY20 due to lower than expected production and operational cost increases in the first half. The broker doesn’t expect any material improvements until FY22.
The broker retains a Buy rating with the target rising to $44.50 from $44.
Target price is $44.50.Current Price is $38.05. Difference: $6.45 – (brackets indicate current price is over target). If MIN meets the UBS target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).