The Australian share market is home to some of the largest mining companies in the world.
But which ASX 200 mining shares would be great options right now? Listed below are two that analysts at Goldman Sachs are tipping as buys. Hereâs what they are saying about them:
Allkem Ltd (ASX: AKE)
The first ASX 200 mining share for investors to look at is Allkem. It is one of the worldâs largest lithium miners with projects across Argentina, Australia, and North America.
From these projects, the company is aiming to grow its production in a way that allows it to command a 10% share of global lithium supply over the long term.
It is for this reason that Goldman believes its shares are a buy even though it is bearish on lithium prices. The broker commented:
Allkem has one of the best production outlooks in our lithium coverage, with broad-based growth optionality, second only to Mineral Resources on an LCE basis when including downstream hydroxide production on an equity basis. This drives our forecast for the companyâs equity LCE production growth of >4x over five years to FY28E, supporting earnings rebounding to near current record levels despite the declining lithium price environment.
Goldman has a buy rating and $12.90 price target on Allkemâs shares.
Rio Tinto Ltd (ASX: RIO)
Another ASX 200 mining share that could be a buy is Rio Tinto. This mining behemoth has a diverse portfolio of operations and projects spanning a number of commodities including aluminium, copper, iron ore, and lithium.
Goldman Sachs is a big fan of the miner due to its valuation, strong free cash flow generation, and production growth outlook, to name just three reasons. It summarised:
We are Buy rated (on CL) on RIO due to: (1) compelling relative valuation vs. peers, (2) Strong FCF and dividend yield with our bullish view on iron ore, aluminium and copper prices, (3) Strong production growth in 2023 & 2024, (4) Pilbara turnaround (~50% of group NAV), (5) Compelling high margin low emission aluminium exposure.
The broker has a buy rating and $136.20 price target on its shares.
The post Want to buy ASX 200 mining shares? Goldman Sachs says these are top buys appeared first on The Motley Fool Australia.
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More reading
- Why are ASX lithium shares powering higher today as the resource sector bleeds?
- Is the Rio Tinto share price a buy at under $120?
- Top brokers name 3 ASX shares to buy next week
- Why Bank of Queensland, Lithium Power, Piedmont Lithium, and Rio Tinto are falling
- Brokers name 3 ASX shares to buy now
Motley Fool contributor James Mickleboro has positions in Allkem. 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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