Mineral Resources shares rebounded on Friday, emerging as the top performer on the Australian stock market after a challenging day. At 10.25am AEST, shares in the Chris Ellison-backed company were up 2.1 per cent to $29.27, leading gains among large-cap stocks. This rise follows a 7.1 per cent decline on Thursday, triggered by a series of broker downgrades.
Analysts at Jefferies downgraded Mineral Resources to “underperform” with a target price of $25. JPMorgan also lowered its recommendation to underperform, setting a target price of $24. These downgrades came after Mineral Resources provided a trading update on Wednesday.
The trading update indicated that net debt had marginally improved to approximately $5.4 billion. This improvement was partially attributed to a $200 million foreign exchange gain, which helped offset significant capital expenditure. Mineral Resources, an Australian company focused on mining and resources development, also provides mining services and has a growing portfolio of lithium and iron ore assets.
Mineral Resources holds $US3.1 billion ($4.8 billion) in unsecured US dollar debt, making the company’s Australian dollar value sensitive to exchange rate fluctuations. The foreign exchange gain noted in the trading update provided some relief amid ongoing financial pressures.
