How did the Fortescue share price stack up in April?

Fortescue shares ended April in the green.

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Key points

  • Fortescue shares closed 4.7% higher for the month of April
  • The Fortescue share price was strongly supported by the company's positive third quarter trading update released later that month
  • Its shares rose 8.11% on the day despite iron ore prices seesawing

The Fortescue Metals Group Ltd (ASX: FMG) share price climbed towards the end of April.

In the 30 days, the iron ore producer’s shares edged 4.7% higher. This puts the company above the S&P/ASX 200 Index (ASX: XJO), which fell almost 1% over the same timeframe.

However, Fortescue shares are struggling for the start of the new month, currently down 4.71% to $20.63. It appears investor sentiment has recently waned following a 4.44% decline in iron ore prices overnight.

What’s driven Fortescue shares higher?

While prices for the steelmaking ingredient deteriorated in April, sinking 9.35% to US$144.10 on 30 April, Fortescue shares remained defiant.

This is because of the positive March quarterly trading update that was provided to the ASX on 28 April.

Fortescue highlighted robust operational performance which drove record year to date iron ore shipments.

In addition, increased average revenue prices, along with boasting one of the world’s lowest-cost margins, supported the bumper result.

Management also noted the successful delivery and ramp-up of its Eliwana project, leading to upgraded FY22 shipment guidance.

It seems the sound third quarter scorecard, along with the mining giant’s lean business model, impressed investors.

Subsequently, Fortescue shares rose 8.11% on the day of the release.

What do the brokers think?

Following the trading update, a couple of brokers rated the company’s shares with varying price points.

The team UBS raised its 12 month price target by 9.4% to $18.70 for Fortescue shares.

However, Goldman Sachs had a more bearish tone, slashing its rating by 2% to $14.90 apiece.

Based on the current share price, this implies a potential downside of almost 30% for investors.

About the Fortescue share price

Up until the end of July, Fortescue shareholders were enjoying strong gains, hitting an all-time high of $26.58 per share. That all came crashing down in the following months, with its shares touching a low of $13.90 in October.

When looking at this time last year, Fortescue shares are down 8%, with year to date up more than 7%.

On valuation metrics, Fortescue commands a market capitalisation of roughly $63 million.

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 Scott Phillips.

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