2023 free cash flow missed Morgan Stanley's estimates, driven by lower cash from operating activities and inventory build.

The broker notes the conservative production settings and higher costs flagged by Iluka Resources and remains cautious about future production grades and costs.

The Eneabba refinery capital cost has increased to $1.7-1.8bn. There was no funding update. Equal-weight rating retained. Target is $7.15. Industry view is Attractive.

Sector: Materials.

Target price is $7.15.Current Price is $7.51. Difference: ($0.36) - (brackets indicate current price is over target). If ILU meets the Morgan Stanley target it will return approximately -5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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