Here is the profit forecast to 2026 for Fortescue shares

This stock could dig up a lot of profit in the next few years.

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The ASX mining share Fortescue Ltd (ASX: FMG) could make a lot of profit in the next few years if it's anything like the last few years. In this article, we're going to look at what the business is projected to make each financial year to FY26.

As an iron ore miner, the price of iron ore will have a key impact on how much profit it's able to make. If the iron ore price is significantly better, or significantly worse than what is expected, then the profit could significantly delight or disappoint.

With that in mind, let's look at some of the forecasts from the broker UBS.

Projection for FY24

We're three-quarters of the way through FY24, so there's not much time left in this financial year.

The company itself has guided that it's expecting iron ore shipments of between 192mt to 197mt, including 2mt to 4mt for Iron Bridge.

UBS suggests Fortescue could generate US$19.7 billion of revenue, make US$6.87 billion of net profit after tax (NPAT) and pay an annual dividend per share of $1.89.

Estimates for FY25

UBS is expecting the iron ore price to be lower in 2025, which could lead to lower financial results and hurt Fortescue shares.

FY25 revenue could amount to US$18.6 billion and NPAT could drop to $6.06 billion. The annual dividend per share is predicted to fall to A$1.47.

The broker notes that Iron Bridge is moving to replace its water pipeline, with installation scheduled by mid-2025 and it's not expected to impact the run-up.

Forecast for FY26

UBS is currently expecting another step down in revenue and profitability in FY26 for Fortescue.

The ASX mining share is projected to make US$16.7 billion in revenue in FY26, with a lot of that lost revenue coming straight off the net profit. The FY26 profit is predicted to be US$4.6 billion, which would be a fall of around 24% if the forecasts end up being correct.

The potential fall in profit could lead to another large drop in the annual dividend per Fortescue share to $1.08.

Foolish takeaway

It's quite possible that UBS' estimates of falling profit may be correct – the Chinese construction sector is not as strong as it used to be and iron ore supply is growing, which could impact the iron ore price.

However, the iron ore price has regularly positively surprised investors over the last few years and it's possible it could happen again. The green hydrogen efforts are interesting, but not expected to add much in the next few financial years for the company.

Motley Fool contributor Tristan Harrison has positions in Fortescue. 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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