Up 5% in a month, is the current Fortescue share price a buy or a sell?

Is it buy, hold or sell for Fortescue shares today?

Key points
  • Fortescue shares have had a good week, but a bad day today 
  • Even so, Fortescue is still one of the best performing ASX 200 blue chips over the past five years 
  • But what does the next year hold in store? Let's see what some brokers reckon... 

It hasn't been a great day so far for the Fortescue Metals Group Limited (ASX: FMG) share price this Thursday. At the time of writing, Fortescue shares have lost 1.33% and are going for $17.78 a share. That stands in stark contrast to the S&P/ASX 200 Index (ASX: XJO), which is currently up 0.07% at under 7,000 points.

But zooming out and the picture looks a little rosier for Fortescue shares. The iron ore miner is still up a robust 4.86% over the past month. Saying that, the Fortescue share price is also down around 4.2% over just the past five trading days. So things have been choppy for this mining giant.

Amid all of this, many investors might be wondering where the Fortescue share price is heading next. After all, Fortescue has been one of the best performing ASX 200 blue-chip shares over the past five years, largely thanks to its eye-watering gain of more than 200% over this period.

So what do the next 12 months hold in store for Fortescue shares?

A man in a high visibility vest and hard hat at the wheel of a heavy mining machinery looks backwards.

Image source: Getty Images

Is the Fortescue share price a buy or a sell today?

Well, unfortunately for optimistic investors out there, there are a few ASX brokers that aren't too keen on Fortescue shares right now.

As my Fool colleague James covered earlier this week, ASX broker Morgans has recently maintained a hold rating on Fortescue shares, with a cut share price target of $17.40 for the next 12 months.

That essentially implies that investors won't see much share price upside at all (albeit with no downside either) over the coming year. Here's what Morgans said:

Despite recent share price weakness, we believe FMG is still trading around fair value and will look for further volatility before considering our investment view. We do see potential for the current volatility to push FMG into oversold territory.

More ASX brokers weigh in

But sadly, that's about as good as it gets for broker opinions on the miner. We also looked at another broker in Goldman Sachs. Goldman has recently retained its sell rating on Fortescue shares.

Dramatically, this broker reckons Fortescue shares are heading as low as $12.70 over the coming year, which would be a loss of almost 30%. Goldman cites Fortescue's far higher current valuation compared to other ASX mining giants like BHP Group Ltd (ASX: BHP) right now as its reasons for being so bearish.

Another broker in Citi isn't as bearish as Goldman. But, as my Fool colleague Bronwyn looked at the other day, it still has a hold rating on Fortescue shares today.

So all in all, it seems there is more than one ASX broker who isn't wild about the Fortescue share price where it currently stands. No doubt investors won't be too pleased by these assessments. But we shall have to see who proves to be correct.

In the meantime, the current Fortescue Metals share price gives this ASX 200 mining share a market capitalisation of $54.74 billion, with a trailing dividend yield of 16.70%.

Motley Fool contributor Sebastian Bowen 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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