Following recent strength in the iron ore price and resulting rise in the Fortescue Metals share price, Morgans downgrades to Hold from Add. Target is reduced to $5.45 from $5.68.
The stock does not appear expensive but spot prices are already at around US$80/t and a discount on low-grade has already narrowed, so the near-term risks appear skewed to the downside, in the broker’s view.
Target price is $5.45.Current Price is $5.46. Difference: ($0.01) – (brackets indicate current price is over target). If FMG meets the Morgans target it will return approximately 0% (excluding dividends, fees and charges – negative figures indicate an expected loss).