Shares in Fortescue Metals Group Limited (ASX: FMG) spiked on Friday to finish trading 1.94% higher at $21.06.
It's been a bumper year so far in 2022 for the iron ore giant, with its share price climbing 10% since January.
It is now up 15% in the past month and another 11% this week of trading, as investors rally behind the company again. Despite this, it trades the benchmark S&P/ASX 200 Index (ASX: XJO) on a longer-term basis.
What's the outlook for Fortescue shares?
According to analyst sentiment, it could be a flat period in April for the company, unless Fortescue Future Industries (FFI) comes through with the goods.
What that means, JP Morgan says, is that "FFI [is] still the elephant in the room" and that "the company still hasn't disclosed details of its pipeline of projects".
"FMG continues to operate its iron ore business like a well-oiled machine," the broker said in a recent note.
"We note reliable production, cost control, and predictable earnings. However, the stock trades above our NPV, and offers a lower FCF yield than peers," it added.
"We look for more clarity on FFI and/or a cheaper entry point for the stock to get more constructive".
That may have happened with FFI just this week, with the company signing a new deal. As The Motley Fool reported at the time:
Fortescue Future Industries has entered a deal with German energy giant E.ON that will see it supply Europe with up to 5 million tonnes of green hydrogen each year.
That's enough to replace around one third of the calorific energy Germany imports from Russia, reducing Germany's reliance on the energy-producing nation
Regardless, the broker remains neutral on Fortescue, alongside 55% of other brokers, according to Bloomberg data. It remains to be seen if this update will result in analyst upgrades or not.
In fact, Fortescue has no buy calls right now per this list, with the remaining 45% of coverage urging clients to sell Fortescue shares.
The consensus price target is $17 per share, currently 19% behind the current Fortescue share price.
Curiously, whilst commodity markets have surged in the last 12 months, the number of brokers advocating to buy Fortescue has crept down substantially to zero, per Bloomberg data.
