Fortescue's (ASX:FMG) share selloff and market concerns over the iron ore price outlook are "overdone," according to a Monday report by The Australian, citing investing and financial firm UBS.
UBS analyst Lachlan Shaw expects that iron ore prices will hold steady at around $90 to $100 per tonne over the next five years.
While Shaw increased the low-grade discount forecast from 15% to 16%, the adjustment still sits below the market estimate of about 18%, acknowledging the possibility of steel production curtailments.
UBS upgraded Fortescue to neutral from sell but lowered its price target to AU$16.70.
Fortescue's shares rose nearly 2% in recent Monday trade.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)
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