In key news on Australian stocks, Fortescue Metals Group Limited (AU:FMG) saw a drop in its iron ore shipments in Q3 2024, primarily due to an ore car derailment on December 30, 2023. Weather disruptions also hit the shipments in the quarter. Following the update, Fortescue shares initially traded down during early trading hours but later stabilized, ending Wednesday with a gain of 0.65%.
Fortescue is a mining company focused on iron ore and green energy.
More from Fortescue’s Q3 Update
For the third quarter, Fortescue recorded iron ore shipments totalling 43.3 Mt (million tons), marking a 6% decrease compared to the same period last year. The metric also came below the consensus estimate of 44.8 Mt.
However, shipments rebounded due to the company’s recovery plan, leading to a sequential rise in monthly numbers. As a result, Fortescue achieved a record performance in March 2024, with shipments of 18.7 Mt. This accounted for approximately 43% of its quarterly shipments.
At the end of the third quarter, Fortescue’s cash balance stood at $4.1 billion, down from $4.7 billion as of December 31, 2023.
Fortescue’s FY24 Guidance
Despite the disturbance, Fortescue confirmed its shipments and cost guidance for Fiscal 2024. That said, the company anticipates that its full-year shipments will fall towards the lower end of its forecast range of 192-197 Mt, reflecting the impact of the derailment and weather disruptions during the quarter.
The company reduced its capital spending forecast for its metals business to a range of $2.5 billion to $2.7 billion from the previous range of $2.8 billion to $3.2 billion, partly due to currency fluctuations.
Is Fortescue a Buy or Sell?
Regarding share price appreciation, analysts hold a bearish outlook on FMG stock, as reflected in its Strong Sell rating. As per TipRanks, the stock has received eight Sell and two Hold recommendations. The average Fortescue share price target is AU$20.86, which is almost 16% below the current trading levels.
