Analysts Are Updating Their Fortescue Ltd (ASX:FMG) Estimates After Its Full-Year Results

Last week saw the newest yearly earnings release from Fortescue Ltd (ASX:FMG), an important milestone in the company's journey to build a stronger business. Revenues of US$16b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.10, missing estimates by 2.6%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the recent earnings report, the consensus from 16 analysts covering Fortescue is for revenues of US$14.7b in 2026. This implies a measurable 5.2% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to drop 14% to US$0.95 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$14.7b and earnings per share (EPS) of US$0.98 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

View our latest analysis for Fortescue

The consensus price target held steady at AU$17.48, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Fortescue, with the most bullish analyst valuing it at AU$19.98 and the most bearish at AU$15.48 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One more thing stood out to us about these estimates, and it's the idea that Fortescue's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 5.2% to the end of 2026. This tops off a historical decline of 0.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.4% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Fortescue to suffer worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Fortescue. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at AU$17.48, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Fortescue analysts - going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Fortescue (at least 1 which is significant) , and understanding them should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.