Fortescue Metals Group Ltd (ASX: FMG) shares are pushing higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed yesterday trading for $18.08. During the Wednesday lunch hour, shares are changing hands for $18.23 apiece, up 0.8%.
For some context, the ASX 200 is up 0.6% at this same time.
Amid slumping iron ore prices, the ASX 200 mining stock remains down 39% since market close on 2 February 2024. Though those losses will have been modestly eased by the $2.47 in fully franked dividends the company paid out over this time.
More recently, however, Fortescue shares have been on a tear and are now up some 25% since the closing low on 23 June.
Which, according to Red Leaf Securities' John Athanasiou, could make today an ideal time to sell the stock (courtesy of The Bull).
Image Source: Getty Images
Should you sell Fortescue shares today?
"Fortescue is a major iron ore producer," said Athanasiou, who has a sell recommendation on Fortescue shares. "Unlike diversified peers, FMG's heavy reliance on iron ore exposes it to volatility."
Iron ore prices have climbed back above US$100 per tonne in July. But most analysts are forecasting that a pending increase in the global supply of the steel-making metal will see the iron ore price retrace back to around US$90 per tonne in 2026.
And Athanasiou isn't swayed by Fortescue's green energy ambitions.
"Its ambitious pivot to green hydrogen and renewables carries higher costs and execution risk, which, in our view, dilutes focus," he said.
"Rising operational costs and leadership turnover add to uncertainty," Athanasiou added.
Indeed, Fortescue shares have faced headwinds amid a raft of executive departures over the past year.
Connecting the dots, Athanasiou said, "We believe the company's valuations are stretched. FMG's risk profile no longer justifies its price, making it a sell for investors prioritising stability and clearer growth paths."
What's the latest from the ASX 200 mining stock?
The last price-sensitive news for Fortescue shares was the company's fourth-quarter update, released on July 24.
The ASX 200 mining stock achieved record quarterly iron ore shipments of 55.2 million tonnes. Full-year FY 2025 shipments also set a new record of 198.4 million tonnes, up 4% from the prior year.
"We met all aspects of our market guidance and cemented our position as the industry's lowest cost producer, with our annual C1 cost declining for the first time since FY 2020," Fortescue Metals and Operations CEO Dino Otranto said at the time.
The miner closed out the quarter with a cash balance of US$4.3 billion.
Fortescue shares closed up 4.3% on the day but have since fallen by around 3.8% from that level.
