2 ASX 200 mining shares just upgraded by Macquarie, one with 20% upside

The materials sector – hosting many of the market’s favourite mining shares – makes up nearly a quarter of the entire S&P/ASX 200 Index (ASX: XJO). No doubt, then, some big winners can likely be found among its ranks.

Fortunately, broker Macquarie has done some digging recently, upgrading its outlook for two ASX 200 materials stocks. Let’s take a look at which materials giants have the top broker feeling bullish this week.

2 ASX 200 mining shares leaving top broker Macquarie bullish

Champion Iron Ltd (ASX: CIA)

The first ASX 200 mining share on the broker’s radar is Champion Iron. It posted record iron ore production from its Canada-based assets last quarter.

The company’s also looking into producing a direct reduction pellet food iron ore able to be used in electric arc furnaces, thereby halving steelmaking emissions.

The Champion Iron share price closed Wednesday’s session at $6.80, but Macquarie thinks it can go far higher.

The broker hit the stock with an outperform rating and an $8 price target, according to reporting by the Australian Financial Review. That marks a potential 17.6% upside.

South32 Ltd (ASX: S32)

Joining Champion Iron in being upgraded is ASX 200 diversified miner South32.

The BHP Group Ltd (ASX: BHP) spin-out produces alumina, aluminium, copper, silver, lead, zinc, nickel, manganese, metallurgical coal, and bauxite, many of which are critical to the energy transition.

Thus, the company’s products will likely be in demand in the coming years and decades. That could be a good sign for its bottom line.

Shares in the ASX 200 diversified mining company last traded at $4.23.

Considering Macquarie’s reported new outperform rating and $5.10 price target, the stock could offer more than 20% upside.

The post 2 ASX 200 mining shares just upgraded by Macquarie, one with 20% upside appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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