Macquarie trims Champion Iron price target
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The news: Macquarie analysts have trimmed their price target on the ASX and Toronto Stock Exchange-listed Champion Iron after cutting their earnings expectations amid a pullback in iron ore prices.
The numbers: The analysts lowered their 12-month ASX price target on the iron ore miner by 3% to $7.30 a share, with earnings per share cut by 22% in FY24 and 10% in FY25.
Shares in the company are down more than 20% so far this year, and last traded at $6.88.
The context: Champion Iron production and shipment volumes in the March quarter are broadly expected to be in-line with market consensus at 3.6 million tonnes and 3.2 million tonnes respectively.
However, lower iron ore prices could weigh on both revenue and earnings, with Macquarie analysts estimating an average realised price of C$107 ($120.13)/tonne, 5% below market expectations.
This would be driven by the company's contract book being more exposed to the March monthly pricing, and shipping delays as a result of Red Sea disruptions, they added.
Iron ore prices are down more than 30% so far this year.
The source: Macquarie research
