Fortescue Metals Group Ltd (FMG) AI Stock Analysis

• Market Cap: $67.30B
• Dividend Yield: 4.96%
• Average Volume (3M): 7.08M
• Price to Earnings (P/E): 12.9
• Beta (1Y): 1.40
• Revenue Growth: -13.65%
• EPS Growth: -39.85%
• Country: AU
• Employees: 15,642
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Industrial Materials
• EPS (TTM): 1.41
• Shares Outstanding: 3,078,964,800
• 10 Day Avg. Volume: 7,903,180
• 30 Day Avg. Volume: 7,078,448
• PEG Ratio: -0.23
• Price to Book (P/B): 1.55
• Price to Sales (P/S): 2.00
• P/FCF Ratio: 9.55
• Enterprise Value/Market Cap: 0.71
• Enterprise Value/Revenue: 3.03
• Enterprise Value/Gross Profit: 7.60
• Enterprise Value/Ebitda: 6.02
• 1Y Price Target: $20.76
• Price Target Upside: -3.84% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: AU$26.00 ▲(20.43% Upside)

Fortescue Metals Group Ltd scores well due to strong technical indicators and a solid financial foundation. The stock's bullish momentum and attractive dividend yield enhance its appeal. However, challenges in revenue and cash flow growth slightly temper the overall score.

Positive Factors

Balance sheet strength

A low debt-to-equity ratio and high equity ratio give Fortescue financial flexibility to fund capex, weather iron-ore cyclicality and pursue strategic projects without immediate refinancing pressure. A ~17% ROE shows historically efficient capital deployment supporting durable returns.

High operating margins

Sustainably high gross and EBIT margins indicate strong cost control and pricing power in iron-ore production. These margins provide a structural buffer against commodity price swings, allowing the company to maintain profitability and fund dividends and investment even during weaker price periods.

Strong operating cash flow

Robust operating cash flow and nearly 2x cash conversion of net income demonstrate durable cash-generating capability. This supports ongoing capex, dividend capacity and balance sheet resilience, enabling strategic reinvestment or debt reduction over the medium term.

Negative Factors

Declining revenue trend

Significant negative revenue growth suggests weakening sales volumes or realized pricing, which can erode scale advantages and pressure margins if sustained. A continued revenue decline would constrain reinvestment capacity and make maintaining dividend and growth plans harder over the coming months.

Earnings pressure (EPS decline)

A near 40% drop in EPS signals material profit compression from lower prices, higher costs or one-off items. Persisting EPS weakness limits retained earnings growth, reduces flexibility for capital allocation and raises scrutiny on operational performance and management execution.

Weakening free cash flow growth

Negative free cash flow growth and FCF roughly matching net income indicate diminishing surplus after capex. This constrains the firm's ability to expand, pay higher dividends or pursue M&A without tapping liquidity, making capital allocation tougher if the trend continues.

Fortescue Metals Group Ltd Business Overview & Revenue Model

Company Description

Fortescue Metals Group Limited engages in the exploration, development, production, processing, and sale of iron ore in Australia, China, and internationally. It also explores for copper and gold deposits. The company owns and operates the Chichester Hub that includes the Cloudbreak and Christmas Creek mines located in the Chichester ranges; and the Solomon Hub comprising the Firetail, Kings Valley, and Queens Valley mines located in the Hamersley ranges of Pilbara, Western Australia. It is also developing the Eliwana mine situated in the Pilbara region of Western Australia. In addition, the company holds a portfolio of properties situated in Ecuador, Argentina, Colombia, Peru, Chile, and Brazil, as well as Portugal and Kazakhstan. Further, it provides port towage services. Fortescue Metals Group Limited was incorporated in 1983 and is headquartered in East Perth, Australia.

How the Company Makes Money

Fortescue Metals Group generates revenue primarily through the sale of iron ore to global markets, especially in Asia. The company's revenue model is based on the extraction and sale of iron ore, which is a critical raw material for steel production. Key revenue streams include the direct sale of iron ore fines and lump ore, with pricing typically linked to global iron ore benchmarks. FMG has established long-term contracts and spot market sales, allowing for flexibility in pricing strategies. Additionally, the company has forged significant partnerships with various stakeholders in the mining and steel industries, enhancing its market reach and operational efficiency. Factors contributing to FMG's earnings include the global demand for steel, operational efficiency in mining and logistics, and strategic investments in technology and infrastructure to reduce costs and increase production capacity.

Fortescue Metals Group Ltd Financial Statement Overview

Summary

Fortescue Metals Group Ltd demonstrates strong financial stability with a solid balance sheet and efficient operations. However, recent declines in revenue and profitability, coupled with negative cash flow growth, suggest challenges in maintaining growth momentum. The company remains well-positioned in terms of financial leverage and capital structure, but needs to address revenue and cash flow pressures to sustain long-term growth.

Income Statement

Fortescue Metals Group Ltd has shown a decline in revenue and profitability in the latest year, with a negative revenue growth rate of -5.67% and a decrease in net profit margin from 31.38% to 21.88%. However, the company maintains a strong gross profit margin of 56.73% and an EBIT margin of 32.49%, indicating efficient cost management despite revenue pressures.

Balance Sheet

The company exhibits a solid balance sheet with a low debt-to-equity ratio of 0.27, reflecting prudent financial leverage. The equity ratio stands at 65.48%, showcasing a strong capital structure. Return on equity is robust at 16.88%, although it has decreased from previous years, indicating a slight decline in profitability.

Cash Flow

Operating cash flow remains strong at $6.47 billion, though it has decreased from the prior year. The free cash flow growth rate is negative at -2.68%, suggesting challenges in generating cash. The operating cash flow to net income ratio is healthy at 1.92, indicating good cash conversion, but the free cash flow to net income ratio has declined to 0.96, highlighting potential cash flow constraints.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	15.83B	15.42B	18.11B	16.66B	17.31B	22.43B
Gross Profit	6.31B	8.75B	11.53B	8.74B	9.74B	15.51B
EBITDA	7.96B	7.56B	10.52B	8.68B	10.40B	16.18B
Net Income	3.44B	3.37B	5.68B	4.80B	6.20B	10.29B
Balance Sheet
Total Assets	30.52B	30.52B	30.06B	28.94B	29.09B	29.09B
Cash, Cash Equivalents and Short-Term Investments	4.33B	4.33B	4.90B	4.28B	5.22B	6.93B
Total Debt	5.44B	5.44B	5.40B	5.31B	6.10B	4.25B
Total Liabilities	10.56B	10.56B	10.53B	10.98B	11.75B	11.36B
Stockholders Equity	19.98B	19.98B	19.55B	17.95B	17.33B	17.73B
Cash Flow
Free Cash Flow	3.20B	3.24B	5.08B	4.44B	3.62B	9.17B
Operating Cash Flow	6.46B	6.47B	7.92B	7.31B	6.27B	12.58B
Investing Cash Flow	-3.92B	-3.92B	-2.81B	-3.08B	-2.91B	-3.69B
Financing Cash Flow	-3.17B	-3.19B	-4.46B	-4.91B	-4.81B	-6.80B

Fortescue Metals Group Ltd Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 21.59
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:FMG, the sentiment is Neutral. The current price of 21.59 is below the 20-day moving average (MA) of 22.34, below the 50-day MA of 21.91, and above the 200-day MA of 18.54, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 42.83 is Neutral, neither overbought nor oversold. The STOCH value of 27.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:FMG.

Fortescue Metals Group Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FMG	76 Outperform	$67.30B	12.91	17.06%	4.96%	-13.65%	-39.85%
ILU	68 Neutral	AU$2.85B	14.99	7.84%	1.04%	-4.84%	-30.61%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
S32	59 Neutral	£20.14B	50.56	3.64%	2.67%	6.53%	―
MIN	58 Neutral	AU$12.55B	-13.71	-26.55%	―	-15.27%	-817.26%
PLS	54 Neutral	AU$15.98B	-75.99	-5.63%	―	-38.69%	-174.12%
IGO	49 Neutral	$7.09B	-7.22	-35.65%	―	-37.23%	-32433.33%

Fortescue Metals Group Ltd Corporate Events

Fortescue Delivers Record First-Half Shipments and Advances Decarbonisation and Copper Push

Fortescue posted record first-half iron ore shipments of 100.2 million tonnes in the six months to 31 December 2025, up 3% year on year, supported by 50.5 million tonnes shipped in the December quarter and rising volumes from its Iron Bridge project. The group maintained strong margins with a hematite C1 cost of US$18.64/wmt in H1 FY26, healthy price realisations for both hematite and Iron Bridge concentrate, and strong cash generation that lifted its cash balance to US$4.7 billion and kept net debt at US$1.0 billion, while reiterating full-year guidance on shipments, costs and capital expenditure. Operationally, Fortescue advanced its decarbonisation agenda with the first 250MWh large-scale battery energy storage system in the Pilbara, progressed studies on Gabon’s Belinga iron ore project via a new presidential taskforce, and moved to acquire the remaining 64% of Alta Copper to deepen its critical minerals exposure in Latin America, underscoring a strategy of diversifying beyond iron ore while scaling low-carbon power for its mines.

The most recent analyst rating on (AU:FMG) stock is a Sell with a A$20.60 price target. To see the full list of analyst forecasts on Fortescue Metals Group Ltd stock, see the AU:FMG Stock Forecast page.

Fortescue Issues 272,520 Unquoted Performance Rights Under Employee Incentive Scheme

Fortescue Ltd has notified the market of the issue of 272,520 unquoted performance rights under its employee incentive scheme, with an issue date of 17 December 2025. The new securities, which will not be quoted on the ASX, reflect the company’s ongoing use of equity-based remuneration to align staff incentives with corporate performance and shareholder interests.

The most recent analyst rating on (AU:FMG) stock is a Sell with a A$18.50 price target. To see the full list of analyst forecasts on Fortescue Metals Group Ltd stock, see the AU:FMG Stock Forecast page.

Fortescue Updates Market on Conversion of Unquoted Equity Securities

Fortescue Ltd has notified the market of the issue or conversion of unquoted equity securities, specifically unquoted options that have been exercised or other unquoted convertible securities that have been converted into shares. The move, outlined in its Appendix 3G filing, reflects changes in the company’s capital structure through the transition of previously unquoted instruments into equity, which may modestly increase the number of shares on issue and could slightly affect existing shareholders’ dilution and the pool of incentive-related securities.

The most recent analyst rating on (AU:FMG) stock is a Sell with a A$18.50 price target. To see the full list of analyst forecasts on Fortescue Metals Group Ltd stock, see the AU:FMG Stock Forecast page.

Fortescue Announces Lapse of 1,309 Performance Rights

Fortescue Ltd has notified the market that 1,309 performance rights (ASX code: FMGAK) have lapsed after the conditions attached to those rights were not met or became incapable of being satisfied as of 23 December 2025. The cessation of these securities represents a small adjustment to the company’s issued capital structure and reflects the outcome of its performance-based incentive arrangements, with no broader operational changes or direct impacts on its core mining activities indicated in the filing.

The most recent analyst rating on (AU:FMG) stock is a Sell with a A$18.50 price target. To see the full list of analyst forecasts on Fortescue Metals Group Ltd stock, see the AU:FMG Stock Forecast page.

Fortescue to Acquire Remaining Stake in Alta Copper

Fortescue Metals Group Ltd has announced its intention to acquire the remaining 64% of Alta Copper Corp’s shares, valuing the company at C$139 million. This acquisition aligns with Fortescue’s strategy to expand its copper portfolio and strengthen its presence in the critical minerals sector. The transaction offers a significant premium to Alta Copper’s shareholders and is supported by Alta Copper’s board. The acquisition will enable Fortescue to advance the Cañariaco Copper Project in Northern Peru, enhancing its industry positioning and operational capabilities.

The most recent analyst rating on (AU:FMG) stock is a Hold with a A$20.00 price target. To see the full list of analyst forecasts on Fortescue Metals Group Ltd stock, see the AU:FMG Stock Forecast page.

Fortescue Metals Announces Cessation of Securities

Fortescue Metals Group Ltd announced the cessation of certain securities, including 42,967 performance rights and 685 vested rights, due to unmet conditions and other reasons. This announcement may impact the company’s capital structure and could have implications for stakeholders regarding the company’s strategic financial management.

The most recent analyst rating on (AU:FMG) stock is a Sell with a A$19.50 price target. To see the full list of analyst forecasts on Fortescue Metals Group Ltd stock, see the AU:FMG Stock Forecast page.

Fortescue Metals Group Issues Unquoted Equity Securities for Employee Incentive

Fortescue Metals Group Ltd announced the issuance of unquoted equity securities, including 8,078,505 performance rights and 233,412 SIP vested rights, as part of an employee incentive scheme. This move is likely aimed at enhancing employee engagement and retention, which could strengthen the company’s operational performance and competitive positioning in the mining sector.

The most recent analyst rating on (AU:FMG) stock is a Sell with a A$19.50 price target. To see the full list of analyst forecasts on Fortescue Metals Group Ltd stock, see the AU:FMG Stock Forecast page.

Fortescue Reinforces Commitment to Combat Modern Slavery with FY25 Statement

Fortescue Metals Group Ltd has released its FY25 Modern Slavery Statement, highlighting its ongoing efforts to combat modern slavery and enhance human rights practices across its operations and supply chain. The statement, which complies with both Australian and UK legislation, outlines key actions such as the launch of a new Sustainable Supply Chain Standard, enhanced due diligence procedures, and ethical recruitment initiatives. These efforts underscore Fortescue’s commitment to transparency and proactive measures in addressing modern slavery risks, particularly in high-risk areas like renewable technologies, ensuring that growth and the transition to green energy do not compromise human rights.

The most recent analyst rating on (AU:FMG) stock is a Sell with a A$19.50 price target. To see the full list of analyst forecasts on Fortescue Metals Group Ltd stock, see the AU:FMG Stock Forecast page.

Fortescue Metals Group Ltd Highlights Growth and Sustainability at AGM

Fortescue Metals Group Ltd held its Annual General Meeting where key executives, including Executive Chairman Dr. Andrew Forrest and CEOs Dino Otranto and Gus Pichot, addressed shareholders. The meeting, which was webcast, highlighted Fortescue’s ongoing strategies and operations, underscoring its commitment to growth and sustainability in the mining and energy sectors.

The most recent analyst rating on (AU:FMG) stock is a Hold with a A$19.30 price target. To see the full list of analyst forecasts on Fortescue Metals Group Ltd stock, see the AU:FMG Stock Forecast page.