FY19 results were slightly ahead of Citi’s estimates. The company has provided no change to guidance with costs expected to be in the range of US$13.25-13.75/wmt.
If steel prices hold up, Citi assesses mill margins will expand sharply and the benchmark 62% iron ore will be in higher demand versus the 58% grade. This keeps the broker on a Neutral rating with an $8.00 target.
Target price is $8.00.Current Price is $7.39. Difference: $0.61 – (brackets indicate current price is over target). If FMG meets the Citi target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).