Where would you buy Mineral Resources (MIN)
Hi James, Shawn and Team, I was just wondering where you see a Buy for MIN given its nearly 18% fall today (19/2) Jeremy
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Answer
Hi Jeremy,
Your question is well timed with Barrenjoey upgrading MIN to a buy on Friday morning with a Price Target (PT) of $35, a nice premium to current levels. The Chris Ellison “Train Wreck” has been covered at length in the press but we believe its created peak negativity in MIN although he may never regain the markets confidence.
MIN’s result this week beat on a few levels but when you’ve lost the markets confidence attention goes to the negatives which in this case was around the haul road issues and debt levels.
- Revenue of $2.29 billion down -8.9% yoy, ahead of expectations for $2.21 billion.
- Underlying Ebitda $302 million, -55% yoy, versus consensus of $200.8 million.
We believe MIN offers excellent risk/reward buying ~$27, but is obviously high risk given debt levels.
