Reporting Rodeo: Here's how analysts think the ASX's big miners will shape up in March quarter reporting season

Want to know how March quarter reporting season could unfold BEFORE the reports come out? Look no further.

The first quarter of 2024, or third of the standard financial year, is now behind us.

That means we have reporting season on the horizon, kicking off this morning with one of the mining industry’s biggest players in Rio Tinto (ASX:RIO).

It’s the time when the tightly held secrets of Australian miners are forced out into the open to be pored over by investors, analysts, rivals, partners and regulators alike.

But you don’t have to go in blind and be caught totally by surprise. Analysts assess market trends, news, prices and high-frequency shipping data to try provide a fulsome picture of how they think a company performed in the preceding three months.

We’ve scoured reports from respected analysts at Goldman Sachs, Canaccord Genuity and RBC Capital Markets in the first part of our preview of the March quarter reporting calendar.

Pilbara Minerals (ASX:PLS)

Reporting Date: Friday April 19
Market Cap: $11.6b

What the experts say
Pilbara remains a favourite of brokers at Canaccord and RBC, with a buy label and price targets of $4.25 and $4.10 respectively for the lithium giant, upside over its $3.84 trading price yesterday.

Canaccord’s Tim Hoff said realised spodumene pricing would be a big focus for the Pilgangoora miner after its US$1200/t BMX auction sale last month.

Analysts’ March Quarter Forecasts
Production and sales — Spodumene: 170,000t and 160,000t (CG), 176,800t and 179,800t (RBC), 176,000t and 159,900t (consensus).
Pricing: US$823/t or US$950/t SC6Eq (CG), US$872/t SC6Eq (RBC), US$965/t SC6Eq (consensus).
Operating cost: $777/t (RBC), US$513/t (CG).

Pilbara Minerals (ASX:PLS) share price today

Mineral Resources (ASX:MIN)

Reporting Date: Wednesday April 24
Market Cap: $13.5b

What the experts say
Iron ore and lithium miner MinRes holds a $78 price target and outperform rating from RBC but a sell rating and $48 price target from Goldman Sachs.

Focus will be on the progress of its 35Mtpa Onslow Iron project, lithium expansion plans, balance sheet gearing as well as its lithium production costs and prices.

Analysts’ March Quarter Forecasts
Production — Iron ore: 4.2Mt, Spodumene: 293,000t (100%) 149,000t (MinRes share), Lithium hydroxide: 6798t (RBC).
Prices — Iron ore: US$100/t, Spodumene (4%): US$669/t, Lithium Hydroxide: US$12,467/t (RBC).
Costs: Not forecast

Mineral Resources (ASX:MIN) share price today

Rio Tinto (ASX:RIO)

Reporting Date: Wednesday, April 17
Market Cap: $174b

What the experts say
Rio Tinto is likely to see a drop in production in the first quarter of its financial year (which runs on a calendar year basis) due to wet weather in the Pilbara. There are divergent projections, with Goldman more bearish than RBC for instance when it comes to Rio’s March quarter output.

The first quarter is often a dull one for iron ore shipments, with Rio typically hitting the gas in the second half of the year, but it will be no orphan, with weak exports also projected for BHP and Fortescue.

Goldman is bullish on iron ore and has a $140.20 12-month price target and buy rating on RIO, while RBC has RIO at sector perform and $132.

Analysts’ March Quarter Forecasts
Production — Iron ore: 80.8Mt (RBC), 75.5Mt (GS), 78.7Mt (cons), Bauxite: 12.7Mt (RBC), 14.1Mt (GS), 13.6Mt (cons), Alumina: 1.905Mt (RBC), 1.802Mt (GS), 1.92Mt (cons), Aluminium: 848,000t (GS), 824,000t (cons), Copper: 165,000t (RBC), 181,000t (GS), 164,000t (cons). Rio also produces titanium dioxide slag, diamonds, borates and high grade iron ore.
Prices: Not provided
Costs: Not provided (RIO only tables costs with its financial results).

Rio Tinto (ASX:RIO) share price today

BHP (ASX:BHP)

Reporting Date: Thursday April 18
Market Cap: $228b

What the experts say
BHP is also likely to see a slide in iron ore output from its rain-stricken WAIO business, with work also ongoing to debottleneck its port in preparation for an expansion in capacity to 300Mtpa.

Its copper and met coal outputs are expected to rise though. A decision on the future of its loss-making nickel business could also be on the cards after flagging a potential transition to care and maintenance ahead of BHP’s half-year results in February.

Goldman has a buy rating and $49.20 PT on BHP, while RBC has a $45 PT and sector perform rating on the miner, but considers it the investment bank’s preferred diversified exposure.

Analysts’ March Quarter Forecasts
Production — Iron ore: 69.8Mt (RBC), 66.8Mt (GS), 70.1Mt (cons), Met coal: 12.2Mt (RBC), 14.6Mt (GS), 13.3Mt (cons), Nickel: 17,800t (RBC), 17,600t (GS), 19,700t (cons), Copper: 458,000t (RBC), 457,000t (GS), 459,000t (cons). BHP also owns the Mt Arthur thermal coal mine and half of the Samarco high grade iron ore JV.
Prices: Not provided
Costs: Not provided (BHP tables costs with its financial results).

BHP (ASX:BHP) share price today

Sandfire Resources (ASX:SFR)

Reporting Date: Tuesday, April 30
Market Cap: $4.2b

What the experts say
A hard running copper price has sent Sandfire shares storming almost 25% higher year to date, with the red metal fetching over US$4.30/lb.

It owns the MATSA Complex in Spain, a long term producer of copper, zinc, lead and silver, as well as the Motheo copper and silver mine in Botswana’s Kalahari Copper Belt. The ramp up there will be a major focus for analysts and investors, with SFR already having approved a step up in capacity from an initial 35,000tpa to 55,000tpa.

Goldman is neutral rated on Sandfire with an $8.40 PT, while RBC has a $9.50 target and outperform rating on the copper miner. It says SFR’s growth is undervalued, expecting free cashflow to increase to more than 15% after Motheo’s ramp up. Canaccord is even more bullish, upgrading its PT from $7.75 to $9.75 having lifted its EV to EBITDA multiples on copper stocks and knocked down its discount rate.

CG thinks SFR will eat a small loss in FY2024 of US$8m before rebounding to profits of US$148m and US$176m in FY25 and FY26.

Analysts’ March Quarter Forecasts
Production — Copper: 27,000t (GS), 23,800t (CG), Zinc: 22,400t (GS), Lead: 1800t (GS), Silver: 1.061Moz (GS).
Prices: Not provided
Costs: US$1.98/lb at MATSA, US$1.54/lb at Motheo (CG).

Sandfire Resources (ASX:SFR) share price today

Fortescue (ASX:FMG)

Reporting Date: Wednesday, April 24
Market Cap: $77b

What the experts say
Green energy toting iron ore miner Fortescue is among the most controversial stocks on the ASX among analysts. Andrew Forrest’s iron ore mines are cash machines, but it will have to begin funnelling billions into hydrogen and decarbonisation projects to match its founder’s renewable energy powerhouse ambitions.

Many, notably Goldman, have questioned the cost of this exercise. It isn’t always entirely clear from FMG’s numbers, even if it claims to have the only ‘fully costed’ plan to entirely strip carbon emissions from its Pilbara iron ore division — a US$6.2b strategy extending to 2030.

A train derailment early this year may have stalled exports, with analysts looking at high frequency port data forecasting a big drop in third quarter production that could threaten its full year hematite guidance of 192-197Mt. Progress at its stuttering Iron Bridge magnetite mine and mysterious Gabonese operation will also be closely watched, along with any news on why the Gibson Island green energy project hasn’t been approved yet.

RBC is underperform rated on FMG with a $23 PT, while Goldman is harsher, posting a sell notice and $16.90 PT, down from a previous $19.60. GS thinks low grade discounts for FMG’s sub-62% Fe ore will increase for the March quarter and FY25, with capex and strip ratios also expected to be higher in the next financial year.

Analysts’ March Quarter Forecasts
Production — Iron ore: 44.1Mt (GS), 43.1Mt (RBC), 44.6Mt (cons).
Prices: US$109/t (GS), US$110/t (RBC), US$111/t (cons)
Costs: US$18/t (RBC), US$18.60/t (cons).

Fortescue (ASX:FMG) share price today

South32 (ASX:S32)

Reporting Date: Monday, April 22
Market Cap: $14.8b

What the experts say
South32 has one of the most complex portfolios of assets in the ASX, a consequence of its spinout from BHP almost a decade ago. It’s trying to make things a little simpler, shunting its coal assets in separate sales to businesses connected with Stanmore (ASX:SMR) and its big wig investors.

That is being replaced by future facing metals, notably copper in the form of a 45% stake in the Sierra Gorda mine in Chile and zinc via the massive development of the Taylor deposit in Arizona. South32 is also big into manganese and alumina. The impact of cyclonic weather that shut its GEMCO operations in the Northern Territory will likely be a major focus in its quarterly on Monday.

RBC has a $3.70 price target on South32, following the copper and other base metals prices upwards, a 6% improvement on the previous PT for the outperform rated stock. Goldman has a $3.80 PT and buy rating on S32, projecting stronger EBITDA in the years ahead, projecting the return of a share buyback with its FY24 results in August.

The bank says S32 will see net debt fall to US$500m by June, well below its US$1-1.5b target, aided by the cash from US$1.65b sale of the Illawarra coal mines to Golden Energy and Resources and M Resources.

Analysts’ March Quarter Forecasts
Production — Alumina: 1.28Mt (GS), 1.28Mt (RBC), 1.31Mt (cons), Aluminium: 285,000t (GS), 287,000t (RBC), 275,000t (cons), Met coal: 1.4Mt (GS), 1.28Mt (RBC), 1.27Mt (cons), Manganese: 1.192Mt (GS), 983,000t (RBC), 1.167Mt (cons), Nickel: 11,000t (GS), 10,900t (RBC), 10,500t (cons), Silver: 2.6Moz (RBC), 3.06Moz (cons), Lead: 22,200t (RBC), 27,700t (cons), Zinc: 16,000t (GS), 12,200t (RBC), 15,600t (cons), Copper: 17,000t (GS), 16,900t (RBC), 17,000t (cons).
Prices: Not available.
Costs: Not available.