Iluka Resources Ltd ILU

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A$6.81 −0.02 (0.29%)

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As of Jul 5, 2024 6:10am Delayed Price Closed

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Commodity Price Update Q3 2024: Value in Mineral Sands, Gold, and Thermal Coal

Jon Mills Jun 27, 2024

Base metals prices surged earlier in the June quarter of 2024 before partially reversing due to concerns over China’s economy. Iron ore prices are broadly stable despite China's struggling property market and weak infrastructure spending, leading to questions over China's steel demand. After updating our commodity price assumptions, no-moat Iluka is the cheapest miner we cover, trading 31% below its unchanged fair value estimate of AUD 9.50.

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Price vs Fair Value

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ILU is trading at a 338% premium.

Price

A$6.81

Jul 5, 2024

Fair Value

A$7.60

Jan 15, 2024

Uncertainty

High

1-Star Price: A$19.78
5-Star Price: A$6.40
Economic Moat: Vcbx
Capital Allocation: Xpwgjwdk

Bulls Say, Bears Say

Bulls

Iluka is an industry leader with relatively high-grade zircon and rutile deposits. Supply can be withheld to defend prices and margins in times of weak demand.

Bears

Mineral sands markets are relatively small. Sales volumes can go through periods of significant demand weakness, such as in 2008-09 and 2012-16.

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Trading Information

Previous Close Price: A$6.83
Day Range: A$6.78–6.88
52-Week Range: A$6.24–11.67
Bid/Ask: A$6.90 / A$6.47
Market Cap: A$2.91 Bil
Volume/Avg: 814,668 / 1.9 Mil

Key Statistics

Price/Earnings (Normalized): 8.82
Price/Sales: 2.26
Dividend Yield (Trailing): 1.03%
Dividend Yield (Forward): 1.03%
Total Yield: 1.03%

Company Profile

Iluka Resources is a leading global mineral sands miner. It is the largest global producer of zircon, and one of the largest producers of titanium dioxide feedstocks (rutile, synthetic rutile). Low zircon costs are underpinned by the high-grade Jacinth-Ambrosia mine in South Australia but reserve life is less than 10 years. A 20% shareholding in Deterra Royalties brings exposure to the high-quality Mining Area C iron ore royalty. Iluka is constructing its West Balranald rutile and zircon mine while also building a rare-earth refinery at Eneabba, which will be able to process Iluka's existing monazite stockpile as well as feed from third parties and future Iluka projects.

Sector: Basic Materials
Industry: Other Industrial Metals & Mining
Stock Style Box: Mid Value
Total Number of Employees: 950
Website: https://www.iluka.com

Competitors

Valuation

Metric	ILU	RIO	BHP
Price/Earnings (Normalized)	8.82	11.32	11.18
Price/Book Value	1.34	2.49	3.64
Price/Sales	2.26	2.46	2.73
Price/Cash Flow	32.63	8.04	7.07

Price/Earnings

ILU

RIO

BHP

Financial Strength

Metric	ILU	RIO	BHP
Quick Ratio	2.20	1.04	1.08
Current Ratio	4.56	1.69	1.57
Interest Coverage	59.09	8.04	7.59

Quick Ratio

ILU

RIO

BHP

Profitability

Metric	ILU	RIO	BHP
Return on Assets (Normalized)	10.93%	11.84%	13.90%
Return on Equity (Normalized)	16.96%	22.48%	31.67%
Return on Invested Capital (Normalized)	15.70%	19.38%	21.70%

Return on Assets

ILU

RIO

BHP

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