March quarter production was affected by the weather but remained strong. Guidance has been revised down slightly at the upper end of the range, to 165-170mt. Realised pricing was better than UBS expected, reflecting the closing of discounts across the quarter and revised pricing terms.
UBS maintains a Sell rating and assumes the market normalises over the next 1-2 years as Vale returns to full production. Target is raised to $6.15 from $5.60.
Sector: Materials.
Target price is $6.15.Current Price is $7.48. Difference: ($1.33) – (brackets indicate current price is over target). If FMG meets the UBS target it will return approximately -22% (excluding dividends, fees and charges – negative figures indicate an expected loss).
