Trent2684 posted the perfect example as to why analysts opinions are nonsense today.
Analysts take a cyclical approach (which basically means they try to price in what the market already know) whereas if you want to be particularly successful you need to be counter-cyclical around the right time (or have a strategy that achieves the same).
Some of the key points to take from FMG analyst research is:
- FMG's balance sheet is in good order.
- They have a bit of a cash flow crunch ahead of them (after dividends) IF IO prices drop as "predicted" (but that expenditure is somewhat discretionary).
- IF IO prices drop as "predicted" FMG may bit a bit over priced here (DCF, not 12 month target prices).
- HOWEVER, analysts factor in no valuation for Fortescue Future Industries (could be a meaningful error there).
The rest is total crap, especially their ratings and 12 month target prices.
I often read analyst research, but I am oblivious to their opinion and target prices.
My personal take on their research is I accept FMG is a little risky from a valuation perspective, but I "bet" that their IO target prices are just too pessamistic (based on my experience of them never achieving the same historically).
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$21.41 |
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-0.260(1.20%) |
Mkt cap ! $65.92B |
Open | High | Low | Value | Volume |
$21.52 | $21.67 | $21.30 | $150.5M | 7.000M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 93 | $21.40 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$21.41 | 12657 | 3 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 93 | 21.400 |
1 | 1996 | 21.380 |
1 | 28304 | 21.370 |
3 | 3650 | 21.350 |
1 | 200 | 21.330 |
Price($) | Vol. | No. |
---|---|---|
21.420 | 1200 | 1 |
21.430 | 1000 | 1 |
21.440 | 13187 | 1 |
21.450 | 34000 | 2 |
21.460 | 85018 | 3 |
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