Fortescue Metals Group Ltd (ASX: FMG) shares have been catching plenty of investor attention this week following the company's FY 2025 earnings results announcement on Tuesday.
Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed down 3.9% on the day and dropped another 0.8% the following day.
But Fortescue shares made up some ground on Thursday, closing up 1.47% at $19.34 apiece.
That sees the stock up around 5% since this time last year, not including the $1.10 a share in fully franked dividends Fortescue paid out (or shortly will pay out) over the full year.
The final dividend of 60 cents per share is still up for grabs, by the way. But you'll have to be fast. Fortescue trades ex-dividend on Monday, 1 September. So you'll need to own shares at market close today to bank that payout.
Although according to the analysts at Macquarie Group Ltd (ASX: MQG), if you plan to hold onto the ASX 200 mining stock, you're liable to lose a fair bit of money over the coming year.
Here's why.
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Fortescue shares tipped to underperform
Fortescue shares came under selling pressure on Tuesday after the miner reported a 26% year-on-year decline in FY 2025 underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$7.9 billion.
That was 2% above Macquarie's earnings expectations.
But Fortescue's net profit after tax (NPAT) of US$3.4 billion – down 41% from FY 2024 – missed profit expectations by 5%.
As for that passive income, the 60 cents per share final dividend was down 32.6% from the prior final dividend. The full-year payout of $1.10 per share represented a 65% payout ratio of NPAT.
Macquarie noted that while the final Fortescue dividend was in line with consensus forecasts, "the payout ratio of 65% was below our annualised 70% expectation".
And that could spell trouble for Fortescue shares down the road.
"Although FMG delivered in-line financials, a 65% pay-out ratio, in our view, indicates management and the board see risk in the capex and price outlook," Macquarie said.
All told, Macquarie said the results were relatively clean.
According to the broker:
The tendency in the mining sector to report on a quarterly basis results in more frequent disclosures on progress against guidance and long-term projections. Against this backdrop, FMG delivered a relatively clean result that should provide investors confidence in delivery.
But Macquarie raised a red flag over potentially higher capex levels ahead.
The broker stated:
Management spoke to increased sustaining capital requirements re FMG's fleet replacements. Whilst no guidance beyond FY26 has been provided, we expect hub replacements and decarbonisation to keep spend at ~US$4.0b until FY30.
Connecting the dots, Macquarie reiterated its underperform rating on Fortescue shares on "expectations of an iron ore market pull-back across the next 12 months".
The broker reduced its 12-month price target by 3% to $15.50. That's almost 20% below Thursday's closing level.
