Fortescue price still dependent on iron ore despite green energy push - Jefferies

JIANDE INTERNATIONAL HOLDINGS

16/02/2022 20:51

** Brokerage Jefferies reiterates "hold" rating and PT of
A$19 on Fortescue Metals Group  FMG.AX , but says downside risk
to iron ore prices could offset benefit of inexpensive valuation
    ** Jefferies says they are neutral on FMG over medium-term
    ** Brokerage adds that while FMG continues to invest in its
Fortescue Future Industries (FFI) green energy and technology
business, investment case for now is highly dependent on iron
ore prices
    ** Iron ore prices are likely to fall in near term and
remain relatively low as the market shifts into surplus -
Jefferies
    ** FMG produces low-grade iron ore that is likely to sell at
a discount to higher-grade ores for foreseeable future -
Brokerage
    ** On Wednesday FMG's H1 profit fell a third on higher
material and labour costs and the miner lowered its interim
dividend  urn:newsml:reuters.com:*:nL4N2UQ4QE
    ** 2 of 18 analysts rate the stock "buy" or higher, 9 "hold"
and 7 "sell" or lower; median PT A$16.80 – Refinitiv data
    ** Company's shares down 16.3% this year, as of last close,
vs 6% increase in miners sub-index  .AXMM 

 (Reporting by Harish Sridharan in Bengaluru)
 ((harish.sridharan@thomsonreuters.com))