In afternoon trade the Fortescue Metals Group Limited (ASX: FMG) share price has recovered from its early decline and is higher by 1% to $4.75.
Unfortunately for its shareholders this slight gain doesn't do much to lessen its sizeable year-to-date decline. The iron ore producer's shares are down close to 20% since the turn of the year.
But there could be more declines to come according to one broker.
A research note out of Citi this morning reveals that its analysts have downgraded Fortescue's shares from a neutral rating to a sell rating. Furthermore, they have cut its price target down to $3.90.
Based on its current share price, that would mean potential downside risk of approximately 18%.
With iron ore inventory levels in China at high levels and more low-cost supply hitting the market, Citi has become more bearish on iron ore prices.
