The ASX-listed Fortescue Metals Group Limited’s (AU:FMG) share price was down 1.65% as of writing on Wednesday in reaction to the company’s announcement that multiple iron ore cars derailed on its train line in Western Australia’s remote Pilbara region.
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Fortescue Metals shares gained over 40% in 2023, driven by the company’s growth in the second half.
Fortescue’s Western Australia Operations Affected
Fortescue’s rail line near Port Hedland, which serves as a major hub for Australia’s iron ore exports, remained non-operational due to the incident. The affected operations are expected to resume by Thursday.
With an annual delivery of over 180 million tonnes of iron ore from the Pilbara region, the company holds the title of the world’s largest iron ore producer. However, as reported by Reuters, a company spokesperson confirmed that the incident did not impact the shipments for December or the first half of Fiscal year 2024. Additional details are still emerging on the nature and extent of the disruption.
The company has launched an internal investigation to find out the accident’s root cause.
In FY23 results, the company reported record iron ore shipments of 192 million tonnes, achieving the upper limit of its guidance numbers. Nonetheless, the profits for the year were impacted by an impairment charge related to the new project site, Iron Bridge. The underlying net profit after tax (NPAT) declined by 11% to $5.5 billion compared to FY22 figures.
Is Fortescue Shares a Good Buy?
Regarding share price appreciation, analysts have a bearish stance on FMG stock, as reflected in the Moderate Sell consensus rating. As per TipRanks, the stock has garnered six Sells, one Hold, and one Buy recommendation.
The average Fortescue share price target is AU$20.55, which is almost 29% below the present trading levels.
