FMG – UBS rates the stock as Upgrade to Buy from Sell

UBS suspects, given commodity volatility stemming from the coronavirus outbreak, China is likely to introduce commodity-intensive stimulus to soften any economic downturn.

The broker upgrades 2020 and 2021 iron ore prices by 9% and 7% respectively. With West Pilbara fines becoming a larger proportion of the product mix in late 2020, the broker lifts price realisation to 90%.

Rating is upgraded to Buy from Sell and the target is lifted to $10.20 from $9.30.

Sector: Materials.

Target price is $10.20.Current Price is $9.48. Difference: $0.72 – (brackets indicate current price is over target). If FMG meets the UBS target it will return approximately 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).

 

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