Iron ore producer FMG has corrected over recent weeks in tandem with the pullback by the underlying bulk commodity, i.e. FMG has retreated -10.6% while iron ore has slipped -13% over the same period. As discussed a few times over recent weeks, we believe the Chinese economy is “looking for a pivot”, which should create a tailwind for both iron ore and FMG. The FMG result today will clearly be important, with expectations for a bumper half yearly $3bn profit.
- We like FMG around 6-8% lower, especially with an estimated 80c fully franked dividend due early in March.
MM likes FMG in the $25.00-$25.50 area
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