It certainly has been a difficult few months for the Fortescue Metals Group Limited (ASX: FMG) share price.
Since peaking at $26.58 in late July, the iron ore producer's shares have fallen 47% to $14.14.
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Where next for the Fortescue share price?
Unfortunately, one leading broker doesn't believe the Fortescue share price has bottomed just yet.
According to a note out of Goldman Sachs this morning, its analysts have retained their sell rating and cut their price target down to $11.40.
Based on the current Fortescue share price, this implies potential downside of almost 20% over the next 12 months.
What did the broker say?
Goldman believes high grade iron ore miners such as Rio Tinto Limited (ASX: RIO) have been sold off and are now in the buy zone. It has a buy rating and $123.40 price target on Rio Tinto's shares.
However, it isn't anywhere near as positive on low grade iron ore miners. This is due to its belief that the low grade discount will widen as steel producers favour higher grade ore.
Goldman explained: "Widening of low grade 58% Fe product realisations: we see spot realisations for FMG's 58% product currently at c. 68-70% of the 62% Index (vs. 84% in the June Q) with likely further headwinds with ongoing China steel production cuts in 4Q21."
In addition, the broker doesn't see enough value in the Fortescue share price at this level despite its pullback.
Goldman highlights that its shares are trading at ~1.5x net asset value (NAV) versus Rio Tinto's shares at 0.84x NAV.
The broker summarised: "Our FY22/FY23 EPS estimates are down 51%/55% on our lower iron ore price forecasts and higher bulk freight forecasts and after lowering our 58% Fe price realisations (of the 62% Fe Index) for FY22 to 74% (from 77%). Our NAV is down 21% to A$9.66/sh (from A$12.25/sh) and our 12-month TP is down 37% to A$11.4/sh (from A$18.0/sh)."
All in all, there could be more red days ahead for the Fortescue share price if Goldman's predictions are accurate.
