Capital expenditure at Iron Bridge has been revised up to US$3.3-3.5bn. The plan has reverted back to the original 135km slurry pipeline. New guidance now includes construction of an offload facility at Lumsden Point.
Credit Suisse was surprised and somewhat disappointed with the increase, given there is no change to the scale of the project. Yet, incorporating adjustments causes minimal earnings impact and the broker retains an Outperform rating and $23 target.
Target price is $23.00.Current Price is $22.12. Difference: $0.88 – (brackets indicate current price is over target). If FMG meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).