Materials, IPO & Equity Analyst

Venkat Ramana Nandyal

Equity Bottom-Up

<p>Initiating coverage of <a href="https://www.smartkarma.com/entities/24163" target="_blank" data-smartkarma-citation="entities:24163:1">Ferrexpo Plc (FXPO LN)</a> with a target of £2.10/sh.</p><ol class=""><li>Markets are unduly concerned about the geopolitical risks and balance sheet risk. We do not anticipate any significant geopolitical or default risk to warrant the massive discount.</li><li>Balance sheet deleverage expected to continue in FY17, internal cash generation sufficient to repay debt, may require some refinancing at iron ore price &lt; US$50/t</li><li>New Projects and Brown field expansions expected to increase value by as much as 18% to base case </li><li>FXPO is valued at £2.73/share, an upside of ~60% to last close price.</li></ol>

Initiating coverage of Ferrexpo Plc (FXPO LN) with a target of £2.10/sh.Markets are unduly concerned about the geopolitical risks and balance sheet risk. We do not anticipate any significant geopolitical or default risk to warrant the massive discount.Balance sheet deleverage expected to continue in FY17, internal cash generation sufficient to repay debt, may require some refinancing at iron ore price &lt; US$50/tNew Projects and Brown field expansions expected to increase value by as much as 18% to base case FXPO is valued at £2.73/share, an upside of ~60% to last close price.

FXPO: Geopolitical & Balance Sheet Risks Overblown; Deep Discount Provides Buying Opportunity

United States

Cleveland-Cliffs Inc. is an American iron ore mining company. The Company supplies iron ore pellets, lumps and fines to blast furnaces in the global steel industry. Cliffs is in the process of expanding its customer base to Electric Arc Furnaces.

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Cleveland-Cliffs Inc (CLF US)

FXPO: Geopolitical & Balance Sheet Risks Overblown; Deep Discount Provides Buying Opportunity

Initiating coverage of Ferrexpo Plc (FXPO LN) with a target of £2.10/sh. Markets are unduly concerned about the geopolitical risks and balance...

Venkat Ramana Nandyal

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)