Higher processed tailing production in the 4Q by Iluka Resources drove a 9% beat in 2H production of zircon, rutile and synthetic rutile (SR), compared to Morgan Stanley's forecasts. Overall, the broker feels it was a balanced result.

Pricing guidance was weak for zircon, while rutile was in line with the broker's estimate, and SR guidance was a marginally miss.

While markets remain weak for zircon, the analysts points out low rutile inventories are a positive

Target $7.40. Equal-weight. Industry view is Attractive.

Sector: Materials.

Target price is $7.40.Current Price is $6.63. Difference: $0.77 - (brackets indicate current price is over target). If ILU meets the Morgan Stanley target it will return approximately 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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