Iluka Resources' 2020 group operating income at $423m was circa -2% below Morgan Stanley's expected $437m but above consensus. Net profit was -$68m below the broker's forecast of $151m led by higher depreciation.

Iluka declared a final dividend of 2c which was below the broker's expected 3.7c.

The company's 2021 production guidance of circa 7% is softer than Morgan Stanley expectations on Zircon and Rutile led by conservative production settings. Synthetic rutile guidance is circa 14% better at the mid-point.

Equal weight with a target price of $5.55. Industry view: Attractive.

Sector: Materials.

Target price is $5.55.Current Price is $7.41. Difference: ($1.86) - (brackets indicate current price is over target). If ILU meets the Morgan Stanley target it will return approximately -34% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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