Macquarie analysts have scaled back total shipment projections for the final quarter of 2018, but the analysts also see how buoyant iron ore prices continue to drive positive earnings momentum for producers in Australia.
On this basis, the broker reiterates Outperform ratings for BHP, Rio Tinto ((RIO)), Fortescue Metals ((FMG)) and Mt Gibson ((MGX)). Target price remains at $40.
Macquarie analysts see “significant upside” to their base case valuations for both FMG and MGX at present spot prices.
Target price is $40.00.Current Price is $34.50. Difference: $5.50 – (brackets indicate current price is over target). If BHP meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).