Citi rates iron ore giant Fortescue 'buy' after steep valuation decline
** Citi hikes iron ore giant Fortescue's FMG.AX rating to "buy" from "neutral"; retains PT to A$21.00
** Attributes rating upgrade to "depth of valuation discount rather than still cautious iron ore (prices) view"
** FMG is down 42% so far this year and was last trading at at A$16.82, its lowest level since early November 2022; PE ratio has halved since year-start to 6.180
** Citi says FMG has "rapidly de-leveraged" balance sheet; greatly reduced risk profile, which the brokerage expects to continue
** Brokerage, however, warns that FMG's 100% iron ore exposure "has proved problematic with FMG risk appetite nearing historic lows vs BHP's"
** Only two of 16 analysts rate FMG "buy", five "hold" and nine "sell"; their median PT is A$20.00 – LSEG data
** FMG has performed worse than its larger peers BHP Group BHP.AX and Rio Tinto RIO.AX YTD, which have each lost ~20%
Reporting by Sameer Manekar in Bengaluru
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