The Mineral Resources Ltd (ASX: MIN) share price has been a very strong performer over the last 12 months.
Since this time in 2022, the mining and mining services companyâs shares have risen a sizeable 28%.
Why has the Mineral Resources share price smashed the market?
A key driver of its strong gains has been the companyâs performance in FY 2023.
Thanks largely to its lithium operations, Mineral Resources reported a huge jump in its profits during the first half.
For the six months ended 31 December, the companyâs underlying earnings before interest, tax, depreciation and amortisation (EBITDA) was up 503% to $939 million and its net profit after tax jumped 1,890% to $390 million.
This allowed the company to bring back its interim payout, with the Mineral Resources board declaring a fully franked $1.20 per share dividend.
Can its shares keep rising?
The good news is that there could be plenty more left in the tank according to analysts at Bell Potter.
This week, the broker reiterated its buy rating with a trimmed price target of $100.00. Based on the latest Mineral Resources share price of $78.02, this implies potential upside of almost 30% for investors over the next 12 months.
In addition, the broker is forecasting fully franked dividend yields of 2.4% in FY 2023, 5.1% in FY 2024, and then 10.1% in FY 2025.
Why is it bullish?
Bell Potter is expecting big things from the companyâs business transformation and is forecasting significant earnings growth.
So much so, it estimates that the Mineral Resources share price trades on a EV/EBITDA ratio of just 3.1x FY 2025 earnings.
It commented:
Over the next two years we forecast that as MINâs business transformation is completed, growing production volumes, and improving margins, will result in significant earnings growth. Notwithstanding our adoption of more conservative lithium price forecasts, we retain the view that the longterm lithium demand outlook remains strong, and producers stand to benefit from further price volatility.
The post ‘Significant earnings growth’: Bell Potter says Mineral Resources share price can rocket 30% appeared first on The Motley Fool Australia.
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More reading
- Goldman Sachs names the ASX 200 lithium shares to buy (and avoid)
- 5 things to watch on the ASX 200 on Thursday
- Passive income investors can get big yields from these top ASX dividend shares: experts
- ASX 200 lithium stocks sink again following Albemarle downgrade
- Which is the best ASX 200 iron ore stock now: BHP, Fortescue, or Mineral Resources?
Motley Fool contributor James Mickleboro 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 no position in any of the stocks mentioned. 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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