While Morgans has lost conviction in the overall strategy of Fortescue Metals Group (read renewables strategy) there’s still considered to be strength in the core iron ore business. The recent iron ore selloff is thought to have pushed the company towards fair value.
As a result, the analyst lifts the target price to $16.90 from $13 though maintains a Hold rating. Rather than renewables, it’s thought the focus should be upon iron ore or even potential diversification into other mature markets.
Sector: Materials.
Target price is $16.90.Current Price is $18.10. Difference: ($1.20) – (brackets indicate current price is over target). If FMG meets the Morgans target it will return approximately -7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
