We’ve recently updated our valuation analysis.

Fortescue Metals Group Valuation

Is FMG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

[object Object] Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FMG?

Other financial metrics that can be useful for relative valuation.

FMG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.6x
Enterprise Value/EBITDA4.3x
PEG Ratio-0.3x

Price to Earnings Ratio vs Peers

How does FMG's PE Ratio compare to its peers?

The above table shows the PE ratio for FMG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average5.7x
BSL BlueScope Steel
3x-32.0%AU$8.4b
CIA Champion Iron
13.3x17.6%AU$3.6b
CRN Coronado Global Resources
2.4x-37.2%AU$3.3b
SGM Sims
4.3x-27.2%AU$2.5b
FMG Fortescue Metals Group
7.1x-24.9%AU$64.7b

Price-To-Earnings vs Peers: FMG is expensive based on its Price-To-Earnings Ratio (7.1x) compared to the peer average (5.7x).


Price to Earnings Ratio vs Industry

How does FMG's PE Ratio compare vs other companies in the AU Metals and Mining Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a-6.1%
n/an/an/a

Price-To-Earnings vs Industry: FMG is good value based on its Price-To-Earnings Ratio (7.1x) compared to the Australian Metals and Mining industry average (11.7x)


Price to Earnings Ratio vs Fair Ratio

What is FMG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FMG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio7.1x
Fair PE Ratio8.7x

Price-To-Earnings vs Fair Ratio: FMG is good value based on its Price-To-Earnings Ratio (7.1x) compared to the estimated Fair Price-To-Earnings Ratio (8.7x).


Share Price vs Fair Value

What is the Fair Price of FMG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FMG (A$21.03) is trading above our estimate of fair value (A$17.47)

Significantly Below Fair Value: FMG is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst FMG forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentAU$21.03
AU$15.56
-26.0%
15.5%AU$21.64AU$11.81n/a19
Nov ’23AU$15.50
AU$15.71
+1.4%
14.0%AU$22.93AU$12.27n/a19
Oct ’23AU$16.82
AU$16.82
+0.01%
12.8%AU$22.78AU$12.96n/a19
Sep ’23AU$17.64
AU$16.65
-5.6%
13.2%AU$21.66AU$12.32n/a19
Aug ’23AU$18.21
AU$16.63
-8.7%
15.2%AU$24.22AU$12.59n/a19
Jul ’23AU$17.00
AU$18.28
+7.5%
14.2%AU$24.53AU$13.83n/a19
Jun ’23AU$20.76
AU$17.87
-13.9%
12.3%AU$23.76AU$13.85n/a19
May ’23AU$21.63
AU$17.71
-18.1%
13.3%AU$24.01AU$13.99n/a19
Apr ’23AU$21.06
AU$16.83
-20.1%
14.2%AU$20.12AU$11.56n/a19
Mar ’23AU$17.76
AU$16.78
-5.5%
15.2%AU$20.78AU$11.70n/a19
Feb ’23AU$19.73
AU$17.14
-13.1%
22.0%AU$28.86AU$11.59n/a19
Jan ’23AU$19.21
AU$16.48
-14.2%
24.8%AU$28.37AU$10.04n/a19
Dec ’22AU$17.27
AU$16.47
-4.6%
28.0%AU$28.75AU$10.17AU$19.9619
Nov ’22AU$14.33
AU$15.76
+10.0%
26.5%AU$27.26AU$11.03AU$15.5018
Oct ’22AU$14.57
AU$17.85
+22.5%
26.6%AU$28.35AU$11.97AU$16.8218
Sep ’22AU$20.33
AU$21.16
+4.1%
17.7%AU$27.88AU$15.19AU$17.6418
Aug ’22AU$24.91
AU$22.61
-9.2%
18.3%AU$29.49AU$15.55AU$18.2118
Jul ’22AU$23.59
AU$22.80
-3.4%
19.7%AU$30.24AU$14.53AU$17.0018
Jun ’22AU$22.82
AU$21.36
-6.4%
20.4%AU$28.78AU$13.51AU$20.7619
May ’22AU$22.59
AU$21.84
-3.3%
20.4%AU$30.25AU$13.61AU$21.6318
Apr ’22AU$20.25
AU$21.95
+8.4%
23.8%AU$31.29AU$10.35AU$21.0618
Mar ’22AU$22.68
AU$22.29
-1.7%
23.1%AU$30.91AU$10.12AU$17.7618
Feb ’22AU$22.27
AU$21.45
-3.7%
24.9%AU$32.20AU$10.18AU$19.7317
Jan ’22AU$23.43
AU$19.17
-18.2%
24.1%AU$28.61AU$7.56AU$19.2117
Dec ’21AU$18.33
AU$16.50
-10.0%
20.8%AU$24.84AU$7.41AU$17.2717

Analyst Forecast: Target price is lower than the current share price.


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