Down 32% in a year, is it time to sell Fortescue shares or scoop up a bargain?

Fortescue Ltd (ASX: FMG) shares are bucking the broader market selling action today and trading in the green.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed yesterday trading for $16.66. As we head into the Wednesday lunch hour, shares are swapping hands for $16.72 apiece, up 0.4%.

For some context, the ASX 200 is down 0.1% at this same time.

But it's going to take a lot more than a few cents per share gain to recoup Fortescue's past year's losses.

At $16.72, Fortescue shares are down 31.9% over the past 12 months, when those same shares were worth $24.54 each.

Even if we add back in the $1.39 in fully franked dividends Fortescue paid out over the year, the cumulative value of the ASX 200 stock remains down 26.2%.

But after that sizeable fall, is the iron ore giant now a screaming bargain, or is it still a falling knife?

For some greater insight into that question, we defer to Catapult Wealth's Dylan Evans (courtesy of The Bull).

What's the outlook for Fortescue shares?

"Fortescue is the fourth largest iron ore producer in the world, growing its scale to the point where its operating costs now rival the levels of BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO)," said Evans, who has a sell recommendation on Fortescue shares.

Why?

According to Evans:

Unlike BHP and Rio, Fortescue is a single commodity producer. This leaves Fortescue heavily exposed to economic conditions in China, particularly as it produces a lower quality ore that can be discounted during times of weaker demand.

Indeed, Goldman Sachs is forecasting that iron ore prices will drop more than 15% from current levels by the fourth quarter of calendar year 2025 to US$85 per tonne.

With copper prices expected to hold firm or rise amid strong global demand and limited new supplies, Evans said, "We prefer exposure to BHP or Rio, which offer diversity through copper and aluminium, markets we expect to generate stronger demand over time."

What's the latest from the ASX 200 iron ore miner?

Fortescue shares closed down 6.2% on 20 February, the day the miner reported its half-year results.

Although the miner achieved record half-year iron ore shipments of 97.1 million tonnes (Mt) for the six months, up 3% year on year, revenue dropped 20% to US$7.6 billion amid lower realised iron ore prices.

Net profit after tax (NPAT) plunged 53% year on year to US$1.6 billion.

Fortescue provided full-year FY 2025 guidance of 190Mt to 200Mt of iron ore shipments.