After its earnings result, what's Macquarie's price target on Fortescue shares?

Let's dig into what Macquarie thinks of Fortescue after its quarterly update.

| More on:
Miner looking at a tablet.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Fortescue Ltd (ASX: FMG) shares are up more than 3% this week, boosted by the reaction to the ASX mining share's quarterly update. As the chart below shows, the company has had a volatile few months in 2025, and this week is no different.

Created with Highcharts 11.4.3Macquarie Group PriceZoom1M3M6MYTD1Y5Y10YALL31 Dec 202430 Apr 2025Zoom ▾13 Jan27 Jan10 Feb24 Feb10 Mar24 Mar7 Apr21 AprJan '25Jan '25Feb '25Feb '25Mar '25Mar '25Apr '25Apr '25www.fool.com.au

Broker Macquarie said in a note that there were some things the analysts liked and some things they didn't like.

The operational update by Fortescue revealed how much iron ore it produced, what it cost to produce that iron ore, the price it sold the iron ore for, and a few other updates.

Let's get into what the broker thought of the ASX mining share's update and Fortescue shares overall.

What the broker liked

Macquarie liked that the miner's production and shipments were "in line" with expectations. That was a good thing because of the wet season impacts felt across the Pilbara mining region during the period.

Fortescue processed 10% more ore than the derailment-impacted FY24 third quarter. With 73% of the mid-point of its production guidance achieved, Macquarie thinks Fortescue is "well positioned" to meet its guidance of 190mt to 200mt. Iron Bridge's production was "weak", but this was impacted by impacts from Tropical Cyclone Zelia.

Another thing that Macquarie liked was the net debt position of the business. Its net debt of US$2.1 billion beat what the market (consensus) was expecting of US$2.6 billion. Most of the difference related to an unwinding of working capital.

The broker also noted that its hematite (iron ore) unit costs of US$17.50 per tonne came in 4% below what the market (consensus) was expecting.

What Macquarie didn't like about Fortescue shares

The main negative for the broker from the update was the iron ore sale price that the high-grade Iron Bridge project achieved. In the third quarter of FY25, it achieved a price that was 100% of the 65% Platts Index (a measure of the grade of iron ore).

That price realisation was a 4% miss and "still a distance from price premiums on an iron adjusted basis", according to Macquarie.

The broker suggested the US$117 per tonne realised price "may indicate temporary placement discounts to encourage mill product trials."

Is the Fortescue share price a buy?

Macquarie is currently neutral on Fortescue shares.

The broker said:

This was a clean result, with FMG demonstrating its ability to deliver in its core business. The cost beat was pleasing, with strip ratios to be lowered. Whilst the net debt beat was helped by a working capital unwind, FY26 energy guidance may lead to lower burn rates.

The broker has a price target of $15 on the ASX mining share. A price target is where the broker thinks the share price will be in 12 months, so Macquarie is forecasting a fall of around 7% from here during the next 12 months.

Motley Fool contributor Tristan Harrison has positions in Fortescue. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Why did the Mineral Resources share price rip 15% higher today?

The iron ore and lithium giant was the fastest riser of the ASX 200 on Thursday.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares?

BHP is expanding its iron ore and copper production.

Read more »

An engineer takes a break on a staircase and looks out over a huge open pit coal mine as the sun rises in the background.
Resources Shares

4 reasons to buy BHP shares today

A leading expert outlines four key reasons BHP shares are a buy.

Read more »

Businessman walks through exit door signalling resignation
Resources Shares

Pilbara Minerals share price drops as CFO announces resignation

It’s been a challenging few years for outgoing Pilbara Minerals CFO Luke Bortoli.

Read more »

Miner looking at a tablet.
Resources Shares

What happened with the BHP share price in May?

Did you buy BHP shares in May? Here’s how much the ASX 200 miner returned.

Read more »

Two men in hard hats and high visibility jackets look together at a laptop screen at a mine site.
Resources Shares

Should I buy Fortescue shares today?

A leading investing expert offers his verdict on the outlook for Fortescue shares.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Resources Shares

Is this a good time to buy BHP shares?

Should investors jump on the ASX mining shares right now?

Read more »

a miner holds his thumb up as he holds a device in his other hand.
Broker Notes

Why Macquarie expects this ASX 200 copper stock to surge 36% in a year

Macquarie forecasts some hefty gains ahead for the ASX 200 copper miner. But why?

Read more »