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Highlights
- Iluka Resources (ILU) and Worley (WOR) join Goldman Sachs' exclusive APAC Conviction List.
- Iluka’s market leadership in zircon positions it for future growth.
- Worley is set to benefit from energy transition and global energy security needs.
Goldman Sachs has recently added two Australian companies to its APAC Conviction List—Iluka Resources, a leader in mineral sands mining, and Worley, a global engineering group. The list highlights stocks that Goldman Sachs believes will outperform in the market, and the inclusion of these two companies is a strong endorsement of their potential for growth.
Iluka Resources (ASX:ILU), which operates one of the world’s largest zircon operations, has garnered attention due to its dominant 30% global market share in this key mineral. Zircon, primarily used in ceramics and chemicals, is seen as one of the most promising commodities for the future, and Goldman Sachs' mining analyst, Paul Young, refers to it as one of the “best structural supply side stories.” Due to this market leadership, combined with plans to construct a rare earths refinery, Iluka is positioned for significant expansion. The new refinery will be the fifth of its kind in the western world and marks an ambitious move to reduce reliance on China for rare earth minerals. Goldman Sachs has set a price target of $7.70 per share for Iluka, suggesting a strong upside potential as it continues to diversify into rare earths.
Similarly, Worley (ASX:WOR) has earned its place on the list due to its vital role in enabling the global shift towards renewable energy and its experience in supporting energy security projects. While Worley’s share price has faced pressure due to reduced customer investment in recent months, analysts at Goldman Sachs believe the company is well-positioned for long-term growth, with expectations for low double-digit earnings growth in FY25. In particular, Worley is set to benefit from the global trend towards the decarbonization of energy systems and the regionalization of supply chains. With Goldman Sachs setting a price target of $18 per share, Worley stands to benefit from continued market demand for services related to energy transformation and sustainability.
Both companies' shares have seen declines of around 20% over the past year, but the renewed optimism reflected in Goldman Sachs' recommendation suggests these companies could see significant upside in the coming years. In fact, Iluka and Worley are the only Australian companies currently on the conviction list, which underscores their strong prospects in the global market.
This move to add these companies to the APAC Conviction List places them alongside international heavyweights like Japan’s Mizuho, Chinese e-commerce giant JD.com, and several others, which could provide further credibility and visibility to both Iluka and Worley as their business plans unfold.
The ongoing spotlight on these stocks will likely bring attention from investors as they pursue opportunities in sectors tied to sustainable energy solutions and essential materials.
