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This ASX materials stock could rise 20% according to this broker

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Business people standing at a mine site smiling.

ASX materials stocks have shown resilience this year amidst broader market softness. 

The S&P/ASX 200 Materials (ASX: XMJ) index has climbed over 10% in 2026. 

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is up just over 2% year to date, and one such ASX materials stock that has climbed this year is Imdex Ltd (ASX: IMD). 

It is an Australian mining equipment and technology company operating globally.

Its technology includes drilling optimisation products, cloud-connected rock knowledge sensors and data and analytics. These aim to improve the process of identifying and extracting mineral resources.

The Imdex share price has moved largely in line with the broader sector this year, rising 10.7%.

Yesterday the team at Bell Potter issued updated guidance on this ASX materials stock, indicating the rise could continue. 

Here’s what the broker had to say. 

Exploration market outlook remains robust

Bell Potter noted that spending on exploration by major and intermediate mining companies is expected to rise by about 24% in 2026. 

This is a strong increase, similar to the growth seen in 2021–2022. Importantly, these larger companies usually make up around 80–85% of Imdex’s revenue. 

In 2021 and 2022, their exploration spending grew by 26% and 29%. Subsequently, this helped drive revenue growth of 31% and 21% in those years.

According to Bell Potter, based on this pattern, the current forecast of 21% revenue growth for 2026 looks conservative. 

Imdex is also better positioned now because it offers more products and services after expanding its technology over the past three years.

IMD’s greater share of wallet in this cycle, following the integration of several hardware and digital products acquired and internally developed over the past 3 years, positions the company well in an expanding market.

Buy rating unchanged for this ASX materials stock

Based on this guidance, the team at Bell Potter have reiterated a buy recommendation for Imdex shares. 

Furthermore, the broker has a $4.60 price target, which indicates a 20% upside from yesterday’s closing price of $3.83. 

Additionally, Bell Potter said is is encouraged by the significant expansion in CY26 gold and copper major and intermediate exploration budgets, suggesting robust uptake of IMD drilling products, tools and software in the short-term. 

Together, with greater junior exploration activity, as a record wave of recently raised equity is deployed, IMD is well positioned to deliver strong revenue growth and operating leverage over the next twelve months. Notwithstanding these tailwinds, we express caution regarding first and second order impacts from the Iran war.

The post This ASX materials stock could rise 20% according to this broker appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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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