US stock futures edge lower after S&P 500 hits record high; PCE data in focus
Investing.com - Australian mining giant Fortescue Metals Group Ltd. (ASX:FMG) was downgraded by RBC Capital from Outperform to Sector Perform with a price target of AUD20.00.
The downgrade follows Fortescue’s fiscal year 2025 results, which RBC analyst Kaan Peker described as "largely in line" with estimates, despite "minor/soft misses on R&D, tax, other costs and deprecation against consensus."
RBC made minor earnings per share revisions of 1-2% after incorporating the results, noting that Fortescue’s hematite operations continue to perform well.
Despite elevated capital expenditure driven by decarbonization efforts, fleet replacement, and hub development, RBC expects Fortescue to maintain strong free cash flow generation.
The downgrade primarily reflects "limited TSR implied by our PT following the recent share price strength," with Fortescue currently trading in line with RBC’s net asset value assessment at approximately 5.5x EV/EBITDA while offering 6% free cash flow and 5% dividend yields.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.