Why is the Mineral Resources share price down a hole on Friday?

The Mineral Resources Ltd (ASX: MIN) share price is losing ground on Friday despite no announcements from the company.

At the time of writing, the mining services company’s shares are trading at $59.03, down 4.47%.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.2% during early afternoon trade.

What’s going down today?

As the broader market struggles to stay afloat, it’s the Mineral Resources share price that’s tanking heavily. This is likely because its shares are trading ex-dividend today.

This means if you purchased Mineral Resources’ shares yesterday or before and owned them at market open today, you’ll be eligible for the latest dividend. If you buy shares in the company today, you’ll miss out on the dividend payout.

Eligible shareholders will receive a fully franked dividend payment of $1 per share on 23 September.

Despite the success achieved, Mineral Resources did not declare an interim dividend in FY 2022. This was due to market uncertainty and a substantial reduction in iron ore prices over the first half of the year.

In FY 2021, the board paid out $2.75 in dividends to shareholders.

Are Mineral Resources shares a buy?

Following the company’s 2022 financial scorecard, a number of brokers updated their ratings on Mineral Resources shares.

As reported by ANZ Share Investing, broker Jefferies raised its price target by 21% to $75 per share. Based on the current price, this implies an upside of 26%.

In addition, Goldman Sachs and Bell Potter increased their price targets by 9% to $69.50, and 5.6% to $80, respectively.

However, the most bullish note came from Macquarie which lifted its outlook by 9.9% to the psychologically significant $100 mark.

The strong price target implies an upside of more than 30% from where Mineral Resources trades today.

Mineral Resources share price snapshot

Throughout the year, the Mineral Resources share price has travelled in circles as lithium prices surged, but iron ore tanked.

Shares in the company are up 10.7% over the past 12 months.

In comparison, the S&P/ASX 200 Resources Index (ASX: XJR) is up just 0.8% over the same period.

Mineral Resources has a price-to-earnings (P/E) ratio of 31.90 and commands a market capitalisation of approximately $11.17 billion.

The post Why is the Mineral Resources share price down a hole on Friday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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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