The Fortescue (ASX:FMG) share price is falling on Monday

The company’s shares are taking a breather…

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The Fortescue Metals Group Limited (ASX: FMG) share price is coming under pressure today. This is despite the iron ore mining outfit providing a robust June quarterly performance last week.

At the time of writing, Fortescue shares are fetching $24.37, down 2.17%. In comparison, the S&P/ASX 200 Index (ASX: XJO) is sitting at 7,497 points, up 1.4%.

What did Fortescue report?

Investors appear to be profit-taking after Fortescue shares hit an all-time high of $26.58 last Thursday.

The world 4th largest miner delivered record iron ore shipments of 49.3 million tonnes (mt) for the 3 months ending 30 June. This resulted in the company achieving 182.2mt for FY21, exceeding its guidance of 182mt.

Furthermore, Fortescue reported a record average revenue of US$168 per dry metric tonne (dmt) for the Q4 period. The strong iron ore price over the last year has resulted in the company averaging US$135/dmt for FY21.

C1 costs increased to US$15.23 per wet metric tonne (wmt), up 2% attributed to COVID-19 related expenses and inflationary impacts. For the year (FY21), C1 costs came to US$13.93/wmt, which was in line with the previous guidance.

Cash on hand stood at US$6.9 billion, with net cash of US$2.7 billion. Gross debt was reduced to US$4.3 billion due to the completion of the refinancing of the senior unsecured notes.

What do the brokers think?

After releasing its fourth-quarter results, a number of brokers rated the company with varying price points.

American multination investment bank, Morgan Stanley cut its price target for Fortescue by 0.5% to $18.55. Credit Suisse followed suit to also reduce their rating by 4.3% to $22.

The most recent broker note came from Goldman Sachs last week, which has initiated a price of $19.90 for the iron ore miner. This implies a downside of about 20% on the current Fortescue share price.

Fortescue share price snapshot

Regardless of Fortescue shares being lower today, over the last 12 months, its shares have rocketed 40% higher. When looking further back, the company’s share price is up roughly 430% from this time 5 years ago.

Based on valuation metrics, Fortescue presides a market capitalisation of approximately $75.1 billion.

Should you invest $1,000 in Fortescue right now?

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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