- Fortescue is expanding into green technology and energy.
- Over five years, Fortescue’s share price dramatically outperformed rivals BHP and RIO.
- Full Year 2023 financial results showed declines in both revenue and profit and a dividend cut.
Steel demand in China is arguably the primary mover of the price of iron ore.
With the Chinese economy faltering, the iron ore price has seen downward trends since 2021 highs.
Source: Statista
Fortescue Limited moved into green energy via its subsidiary company, Fortescue Futures Industries, and has projects underway around the world, generating an abundance of press coverage. However, profits from these efforts may be a long time coming.
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In 2023, the company acquired the Phoenix Hydrogen Hub and announced plans to establish a facility for manufacturing automotive and heavy-industry batteries, hydrogen generators, fast chargers and electrolysers in the state of Michigan.
Over five years, Fortescue crushed its competitors in share price appreciation.
Source: ASX
The FMG share price, along with that of BHP and RIO, took a downward move in the past week despite the price of iron ore topping $140 per tonne, hitting $144.16 as of 3 January 2024.
Expert forecasts for the price of iron ore in 2024 may need to be reassessed in light of the Chinese government’s announcement of the possibility of increasing infrastructure spending by $137bn.
Current analyst consensus on FMG shares is UNDERPERFORM, with MarketScreener reporting one analyst at OUTPERFORM, four at HOLD, three at UNDERPERFORM, and seven at SELL.
Yahoo Finance Australia also reports a consensus UNDERPERFORM rating, with two analysts at STRONG BUY, six at BUY, seven at HOLD, and five at UNDERPERFORM.
An analyst at Fairmount Equities has a contrarian viewpoint, with a bullish view that reminds investors that Fortescue’s share price outperformed bearish iron ore forecasts in 2023.
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