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Fortescue Metals Group Ltd - Stock Quote FMG

Morningstar's Fortescue Metals Group Ltd Stock Analysis

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Raising Fortescue's FVE to AUD 14.50 on Transition in Coverage, Higher Midcycle Iron Ore Prices

Jon Mills, CFA Equity Analyst

Analyst Note

| Jon Mills, CFA |

We raise our fair value estimate for no-moat Fortescue Metals to AUD 14.50 per share, up from AUD 14 previously, following transition of coverage to a new analyst. Higher assumed midcycle iron ore prices from 2026 are partially offset by lower near-term iron ore prices, a greater assumed sales discount to the 62% benchmark price on Fortescue’s lower grade ore and delays in Iron Bridge coming online.

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Fortescue Metals Group Ltd's Company Profile

Business Description

Fortescue is an Australia-based iron ore miner. It has grown from obscurity at the start of 2008 to become the world's fourth-largest producer. Growth was fuelled by debt, now repaid. Expansion from 55 million tonnes in fiscal 2012 to about 185 million tonnes in 2022 means Fortescue supplies nearly 10% of global seaborne iron ore. Further expansion above 200 million tonnes is likely once it completes construction of its 22 million tonne Iron Bridge magnetite mine. However, with longer-term demand likely to decline as China's economy matures, we expect Fortescue's future margins to be below historical averages. More recently, Fortescue has diversified into green energy, with ambitions to become a major supplier of green hydrogen and green ammonia. Its efforts here are at an early stage.

87 Adelaide Terrace, Level 2, East Perth
Perth, WA, 6004, Australia
T +61 862188888
Sector Basic Materials
Industry Other Industrial Metals & Mining
Most Recent Earnings
Fiscal Year End Jun 30, 2022
Stock Type
Employees 3,898