Fortescue Ltd

ASX:FMG Stock Report

Market Cap: AU$54.5b

Fortescue Valuation

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

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

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$17.73) is trading below our estimate of fair value (A$37)

Significantly Below Fair Value: FMG is trading below fair value by more than 20%.

Key Valuation Metric

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

Key metric: As FMG is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for FMG. This is calculated by dividing FMG's market cap by their current earnings.
What is FMG's PE Ratio?
PE Ratio6.2x
EarningsUS$5.68b
Market CapUS$35.31b

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.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average10.1x
BSL BlueScope Steel
11.4x8.3%AU$9.2b
CIA Champion Iron
10.1x7.5%AU$2.8b
DRR Deterra Royalties
12.3x-6.9%AU$1.9b
SMR Stanmore Resources
6.7x-17.1%AU$2.8b
FMG Fortescue
6.2x-27.1%AU$54.5b

Price-To-Earnings vs Peers: FMG is good value based on its Price-To-Earnings Ratio (6.2x) compared to the peer average (10.1x).

Price to Earnings Ratio vs Industry

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

9 CompaniesPrice / EarningsEstimated GrowthMarket Cap
KCN Kingsgate Consolidated
1.6x-13.3%US$201.93m
GRR Grange Resources
2.5xn/aUS$172.35m
RHI Red Hill Minerals
1.7xn/aUS$164.83m
PTN Patronus Resources
2.3xn/aUS$65.73m
FMG 6.2xIndustry Avg. 11.3xNo. of Companies14PE01224364860+
9 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: FMG is good value based on its Price-To-Earnings Ratio (6.2x) compared to the Australian Metals and Mining industry average (11.3x).

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 Ratio6.2x
Fair PE Ratio11.7x

Price-To-Earnings vs Fair Ratio: FMG is good value based on its Price-To-Earnings Ratio (6.2x) compared to the estimated Fair Price-To-Earnings Ratio (11.7x).

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$17.73
AU$18.87
+6.5%
12.5%AU$23.35AU$14.85n/a17
Nov ’25AU$19.49
AU$18.61
-4.5%
13.0%AU$23.17AU$14.61n/a16
Oct ’25AU$19.96
AU$18.25
-8.6%
13.2%AU$23.88AU$13.89n/a16
Sep ’25AU$18.27
AU$18.99
+3.9%
15.4%AU$25.28AU$14.30n/a17
Aug ’25AU$18.99
AU$19.50
+2.7%
15.0%AU$26.17AU$14.27n/a17
Jul ’25AU$21.76
AU$21.00
-3.5%
16.8%AU$26.32AU$12.46n/a17
Jun ’25AU$24.74
AU$21.32
-13.8%
16.3%AU$26.49AU$13.28n/a17
May ’25AU$25.32
AU$21.48
-15.2%
16.5%AU$26.67AU$13.37n/a16
Apr ’25AU$25.70
AU$21.97
-14.5%
14.4%AU$26.19AU$14.07n/a16
Mar ’25AU$26.21
AU$22.41
-14.5%
12.2%AU$26.34AU$17.40n/a16
Feb ’25AU$29.50
AU$22.24
-24.6%
11.9%AU$26.05AU$17.33n/a15
Jan ’25AU$29.02
AU$20.23
-30.3%
15.5%AU$26.14AU$15.78n/a15
Dec ’24AU$25.20
AU$19.23
-23.7%
13.6%AU$23.95AU$15.27n/a15
Nov ’24AU$22.86
AU$18.70
-18.2%
13.9%AU$24.13AU$15.64AU$19.4915
Oct ’24AU$20.92
AU$17.70
-15.4%
16.2%AU$24.23AU$13.79AU$19.9615
Sep ’24AU$20.30
AU$17.20
-15.3%
11.5%AU$20.05AU$13.74AU$18.2717
Aug ’24AU$21.98
AU$18.04
-17.9%
12.4%AU$23.05AU$14.69AU$18.9917
Jul ’24AU$22.18
AU$17.72
-20.1%
9.5%AU$19.99AU$14.94AU$21.7617
Jun ’24AU$19.37
AU$17.92
-7.5%
12.4%AU$23.38AU$14.09AU$24.7417
May ’24AU$20.95
AU$17.79
-15.1%
12.2%AU$23.18AU$14.21AU$25.3217
Apr ’24AU$22.49
AU$17.65
-21.5%
13.1%AU$23.70AU$14.11AU$25.7017
Mar ’24AU$22.12
AU$17.72
-19.9%
14.5%AU$23.44AU$13.76AU$26.2118
Feb ’24AU$22.33
AU$17.00
-23.9%
15.4%AU$22.81AU$12.65AU$29.5019
Jan ’24AU$20.51
AU$16.43
-19.9%
15.9%AU$21.82AU$11.69AU$29.0219
Dec ’23AU$19.96
AU$15.43
-22.7%
15.6%AU$21.54AU$11.54AU$25.2019
Nov ’23AU$15.50
AU$15.71
+1.4%
14.0%AU$22.95AU$12.28AU$22.8619

Analyst Forecast: Target price is less than 20% higher than the current share price.

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