Morgan Stanley sees the risk implied by Mineral Resources’ agreement with Hancock Prospecting and Roy Hill Holdings to consider a new port facility at Port Hedland as skewed to the negative.
If agreed upon and approved by the state government it could reduce Mineral Resources’ capex spend on the project but also reduce the revenue from two out of every three mining tonnes. And additional tonnes to the market should be negative for the iron ore price.
More detail is required and in the meantime the broker retains Underweight and a $38.70 target. Industry view: In-Line.
Target price is $38.70.Current Price is $45.83. Difference: ($7.13) – (brackets indicate current price is over target). If MIN meets the Morgan Stanley target it will return approximately -18% (excluding dividends, fees and charges – negative figures indicate an expected loss).