Iluka Resources (ASX:ILU) shares fell more than 6% amid growing recession fears, as central banks continue to hike interest rates in a bid to tame inflation.
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Iluka Resources is a Australian mineral sands mining and processing company. In addition to its domestic operations, the company also has projects in the U.S. and Sierra Leone.
As minerals sands are used in industrial and consumer goods, demand for the commodity can be strongly linked to global GDP growth. As such, recession worries can lead to investors souring on mineral sands companies.
Iluka Resources share price prediction
Iluka shares have climbed about 20% in the past three months. Analysts mostly believe that a pullback in the stock presents a buying opportunity. According to TipRanks’ analyst rating consensus, Iluka Resources stock is a Moderate Buy based on four Buys and three Holds. The average Iluka Resources share price prediction of AU$11.62 suggests about 24% upside potential.
Iluka Resources scores an eight out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has potential to outperform market expectations.
Closing thoughts
While a recession may be a cause for concern for Iluka Resources’ investors, an economic downturn is not inevitable. If central banks can lower inflation without triggering a global economic recession, then companies like Iluka could benefit from a reduction in their operating costs.
