From Macquarie, no surprises here given the bubble:
We retain our positive stance on most of the bulk commodity producers. There is material upside risk to our base case forecasts for coking coal, manganese, iron-ore and thermal coal. We recently turned positive on WSA, SFR and OZL and reiterate our positive view on BHP, RIO, S32 and FMG.
Modest earnings adjustments to reflect updated FX and alumina prices: We have made some modest adjustments to our earnings forecasts to incorporate slight changes to our A$/US$ forecasts, upgrades to our alumina price forecast and a US$10/t lift in our 4QCY16 iron-ore price estimates. Iron ore producers see earnings upgrades for FY17/CY16 while S32 sees 8% upgrades for FY17 and FY18 due to the increase in our alumina price forecasts. Price targets remain largely unchanged with the exception of S32 rising ~3%, FMG 11% and NCM falling 4%.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
