On Tuesday, RBC Capital analysts lowered the price target for Mineral Resources Limited stock to AUD39.00 from AUD40.00, while maintaining an Outperform rating. The decision followed a recent visit to the company’s Onslow operations, where several key updates were noted.
The analysts highlighted that the haul-road at Onslow is expected to achieve a capacity of 35 million tonnes per annum (Mtpa) by the middle of fiscal year 2026. However, this is anticipated to come with higher operating costs. Mineral Resources is reportedly making systematic progress on remediation and upgrade work for the haul-road, with completion expected by September 2025.
The updated unit-cost and timeframe for Onslow have led RBC Capital to maintain expectations that Mineral Resources will begin to reduce its debt in fiscal year 2026. Despite this, the analysts emphasized the importance of further cost reductions in the company’s lithium assets.
In addition to revising guidance for Onslow, RBC Capital has incorporated higher ramp-up costs into their forecasts. This has resulted in reduced earnings per share estimates for fiscal years 2025, 2026, and 2027.
The revised price target reflects these adjustments, with RBC Capital reducing their target by AUD1 to AUD39 while keeping an Outperform rating on the stock.
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