Credit Suisse has highlighted how relatively cheap iron pellets maker Ferrexpo PLC (LSE:FXPO) is right now.
The snag is the company is based in Ukraine, but even with severely curtailed production due to the war, the broker sees some value even now.
Ferrexpo’s shares are trading at a significant discount even if production is severely curtailed until the end of 2023, said the broker.
The shares represent a 30% discount related to the Ukraine conflict, it adds.
“With 65% iron ore back above US$180/t and pellet premiums back at all-time highs, the company is able to generate strong cash flows even at reduced production levels.”
Even though where Ferrexpo operates, Poltava has seen relatively little fighting, reliance on gas and its geographical concentration make it potentially vulnerable.
Credit Suisse's target price is 290p against 1678.5p currently, but because of the risks Credit Suisse can only recommend a hold.