Analyst Note| Mathew Hodge, CFA |
We lower our fair value estimate for no-moat rated Fortescue Metals to AUD 13 per share from AUD 15.10 per share previously. The shares have gone ex-entitlement to the final dividend, an unusually large AUD 2.11 per share or 14% of our previous fair value estimate. Ordinarily, we would not adjust the fair value estimate for dividends, given companies are generally creating new shareholder value daily and the size of the shareholder payout is usually small. But this is not the case for the Fortescue dividend. Our analysis otherwise is intact.