Fortescue Metals Group Limited (ASX: FMG) has been underperforming the ASX 200 index in 2021, with the Fortescue share price falling 4% so far this year.
In light of this, investors will no doubt be interested to know if analysts think the Fortescue share price performance will improve in the future.
What are leading brokers saying about the Fortescue share price?
Opinion is largely divided on where Fortescue's shares will be heading from here.
However, one thing that almost all analysts are in agreement with, is that the Fortescue dividend in 2021 will be big.
Where are its shares heading?
Let's start with the Fortescue share price. Among the most bullish brokers out there are the team at Macquarie.
Last month Macquarie retained its outperform rating and held firm with its Fortescue share price target of $27.00. Based on the current Fortescue share price of $23.71, this implies potential upside of 14% over the next 12 months. Macquarie is expecting a strong full year result from Fortescue in FY 2021 thanks to sky high iron ore prices.
One broker that feels the Fortescue share price is about fair value at the current level is Citi. Its analysts currently have a hold rating and a Fortescue share price target of $23.96. This means only limited upside for the miner's shares over the next 12 months.
Finally, the team at Goldman Sachs feel that Fortescue shares are now overvalued. The broker currently has a sell rating and $18.20 share price target. This implies potential downside of ~18% over the next 12 months. It is bearish due to its valuation, the widening of low grade iron ore discounts, and elevated capital expenditure. In respect to its valuation, Goldman commented: "The stock is trading at 1.6x NAV vs. BHP and RIO at c. 1x NAV, and 9x FY23 EBITDA when iron ore is back at the US$80-90/t level vs. BHP and RIO on c. 5x FY23."
Fortescue dividend in 2021
The good news for income investors is that the Fortescue dividend in 2021 is tipped to be among the biggest you'll find on the ASX 200.
Macquarie currently estimates that Fortescue will pay a fully franked $3.45 per share dividend, Citi is forecasting a $4.04 per share dividend, and Goldman has pencilled in a $3.18 per share dividend.
Based on the current Fortescue share price, this will mean yields of 14.5%, 17%, and 13.4%, respectively.
Commenting on the Fortescue dividend, Citi said: "Our FY21 dividend increases 4% to A404cps, inclusive of a fully franked final dividend payment of A257cps, a 10.4% yield on its own."
