Morgan Stanley notes Sandfire Resources' quarterly update contained multiple negative surprises, mostly related to Matsa. Motheo's copper production and costs proved in line with forecasts, and the ramp-up remains on-track, the broker adds.

Management has left FY24 production guidance intact, but lifted projected costs. Drilling at Black Butte delivered positive news, as is the inferred resource at Motheo.

Combining it all together into a fresh modeling update, the broker's target has increased to $8.40 (was $7.65).

The Equal-weight rating is maintained. Industry view is Attractive. Forecasts for FY24 have fallen, further out estimates have been left unchanged.

Sector: Materials.

Target price is $8.40.Current Price is $9.18. Difference: ($0.78) - (brackets indicate current price is over target). If SFR meets the Morgan Stanley target it will return approximately -9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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