One fund manager believes the Fortescue Metals Group Limited (ASX: FMG) share price could have a 145% upside if the company is successful in its current endeavours.
Its foray into green hydrogen, through its renewable energy leg Fortescue Future Industries (FFI), teamed with its position as one of Australia's largest iron ore producers could see its stock continuing to boom into the future.
At the time of writing, the Fortescue share price is $20.28, 1.6% higher than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.83% right now.
Let's take a look at what the portfolio manager of Tribeca Investment Partners' Global Natural Resources Fund, Ben Cleary, thinks might be in store for the iron ore giant.
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Could the Fortescue share price have a 145% upside?
Cleary recently told the Australian Financial Review (AFR) that, right now, Fortescue shares are coming with a free side of hydrogen, one that might be particularly valuable in the future. The AFR quoted him as saying:
Fortescue is well ahead of peers in terms of hydrogen and ammonia production, and this could be worth $50 a share or more if they execute.
However, what's truly got Cleary bullish on ASX 200 giant is its iron ore business.
The fundie is positive the price of iron ore will have another good year in 2022, and it might bring the Fortescue share price along with it. Cleary commented on his expectations for the coming 12 months:
I think iron continues to rally in the first quarter to $US150 a tonne or higher, well above current consensus expectations of $US100 a tonne.
China's credit impulse is starting to expand after mostly contracting in 2021 and infrastructure demand for iron ore should be particularly strong.
According to data from CNBC, iron ore is currently going for US$124.14 a tonne. That's despite it reaching record highs of more than US$200 mid-last year.
The commodity's tumble might explain why the Fortescue share price fell 18% over the course of 2021. Still, it has gained 233% over the last 5 years, leaving long-term investors well and truly in the green.
