Scarcity to drive share price to $3/sh $3/sh represents 6x FY09 earnings (ie post price rise, volume growth) on our base case, 7.8x assuming flat 0.85 A$/US$, or 6.7x assuming 0.85 A$/US$ and a 50% iron ore price increase. These multiples are consistent with the markets pricing of mining stock earnings at peak cycle pricing globally.
Last weeks $170/t spot iron ore price signals panic
The spot iron ore price is suggesting that for the first time this cycle, steel makers may have production constrained by lack of iron ore feed, leading to buyer panic in the upcoming negotiations. This would argue for an early settlement at ore above market expectations, at least for Brazil to China, assuming no change to pricing system.
merrill lynch lift target to 3 dollars
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33.5¢ |
Change
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Mkt cap ! $408.1M | |||
| Open | High | Low | Value | Volume |
| 33.5¢ | 33.8¢ | 33.0¢ | $475.3K | 1.428M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 3000 | 33.0¢ |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| 33.5¢ | 137710 | 1 |
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