Macquarie rates MGX as Upgrade to Outperform from Neutral (1) - Mount Gibson Iron has increased shipment rates and is on track to achieve and potentially surpass its FY23 guidance of 2.9m wmt. On Macquarie's forecasts the company generates around $700m in cash over the remaining life of the mine, which lifts to $1bn at spot.
The broker forecasts cash of $133m at the end of FY23, a 60% increase quarter on quarter. Rating is upgraded to Outperform from Neutral given the strong cash flow, and the target is raised to $0.60 from $0.50.
Target price is $0.60 Current Price is $0.48 Difference: $0.12 If MGX meets the Macquarie target it will return approximately 25% (excluding dividends, fees and charges). The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of 9.50 cents . At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.05.
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 8.00 cents and EPS of 16.70 cents . At the last closing share price the estimated dividend yield is 16.67%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 2.87.
MGX Price at posting:
48.0¢ Sentiment: Buy Disclosure: Held
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