The IGO Ltd (ASX: IGO) share price is finishing a rough week on the ASX in the red.
The nickel, copper, cobalt, and lithium explorer and producer may have had its previously accepted acquisition offer swept out from underneath it on Tuesday.
Today, its facing reports analysts estimate a revised bid for nickel producer, Western Areas Ltd (ASX: WSA) could start at $4 per share – 19% higher than IGO’s previously accepted bid.
Additionally, the company has faced a bearish note from broker UBS on Friday.
At the time of writing, the IGO share price is $13.62, 2.12% lower than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) has gained 0.6% so far on Friday.
Let’s take a closer look at what could be driving the resource company’s shares lower today.
What’s weighing on the IGO share price today?
The IGO share price is in the red on Friday, bringing its losses for the week so far to 5.4%. And today’s dip is not without cause.
As The Motley Fool Australia’s James Mickleboro reported earlier today, UBS’ latest outlook on IGO is far from positive.
The broker reportedly slapped it with a $12.65 price target and a ‘sell’ rating today. It cited its concerns the prices of lithium and nickel are unsustainable.
Additionally, analysts from Shaw and Partners – which reportedly has a price target of $4.40 on Western Areas – were quoted by The Australian on Friday, saying:
We think that a price up to $4 [per] share would be digestible – given the evolving nickel backdrop – for the dispassionate and disciplined IGO team.
The reports follow previous rumours IGO is in talks to bid up to $4 apiece for Western Areas’ stock.
While the IGO share price has been suffering, that of Western Areas is still frozen.
The acquisition target extended its then-two-day trading halt on Thursday pending the release of an update on the takeover talks.
The post Why is the IGO share price underperforming on Friday? appeared first on The Motley Fool Australia.
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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