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Investing.com - JPMorgan downgraded Fortescue Metals Group Ltd. (ASX:FMG) from Overweight to Neutral with a price target of AUD20.00 on Tuesday.
The iron ore producer reported underlying EBITDA of $7.7 billion, which aligned with JPMorgan and consensus estimates, while underlying earnings of $3.37 billion were 3% above JPMorgan’s estimate but 2% below Bloomberg consensus.
Fortescue declared a final dividend of $0.60 per share, bringing the full-year dividend to $1.10 per share at a 65% payout ratio, which exceeded JPMorgan’s projection of $0.52 per share but matched consensus expectations.
The company maintained its previously released FY26 guidance, with net debt standing at $1.11 billion as pre-reported, while JPMorgan indicated its net present value and EBITDA estimates remain largely unchanged following the results.
JPMorgan cited Fortescue’s 32% share price increase since June lows (compared to ASX’s 5% gain) and concerns about iron ore price sustainability with the approaching Simandou project as key factors in the downgrade decision, noting the stock is now trading in line with the firm’s price target.
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