Fortescue Metals Group Ltd (ASX: FMG) shares are slipping today.
Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed yesterday trading for $19.46. In morning trade on Friday, shares are changing hands for $19.32 apiece, down 0.7%.
For some context, the ASX 200 is down 0.3% at this same time.
Taking a step back, Fortescue shares are down 2.1% over the last 12 months. Though that doesn't include the $1.10 a share in fully franked dividends the miner paid out over the full year.
As for the year ahead, the team at Macquarie Group Ltd (ASX: MQG) expects the mining giant to face more headwinds.
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Are Fortescue shares headed for a fall?
In Macquarie's new 'Diversified Miners Preview' report, the broker noted:
We expect FMG's 1QFY26 shipments to be in line with VA estimates of ~50Mt, with C1 cash costs 4% below at US$17.6/t (VA: US $18.2/t) and realised pricing slightly stronger (+2%) vs. VA at US$87/t (VA: US$85/t).
But Macquarie expects Fortescue's iron ore shipments to decline quarter on quarter, with the broker maintaining an underperform rating on Fortescue shares.
According to Macquarie:
On a QoQ basis, we estimate lower shipments (-10%), despite higher 3% higher processed volumes slightly up (+3%). We anticipate mining productivity to have a lower QoQ start, down 6% QoQ to and remaining more or less flat (~52Mt/q) over the course of the year. FMG had a strong finish to 4QFY25 and lower volumes in 1QFY26 is in line with seasonality with heavy maintenance at the start of a new financial year.
Macquarie believes that Fortescue's FY 2026 guidance is largely achievable.
When the ASX 200 miner released its FY 2025 results on 26 August, management provided FY 2026 guidance for iron ore shipments of 195 million tonnes to 205 million tonnes. C1 costs for Hematite (an iron oxide mineral) are forecast to be in the range of US$17.50 to US$18.50 per wet metric tonne. And Fortescue expects metals capital expenditure to be in the range of US$3.3 billion to US$4.0 billion, while energy capex is forecast to be around US$300 million.
Commenting on that guidance, Macquarie said:
Our overall FY26 estimates remain aligned to FMG's mid-point guidance for production (200Mt) and C1 costs (US$18/t). We estimate slightly higher capex (+3%) of ~US$3.8b vs. the mid-point of US$3.7b. Our estimated spend on FFI also remains in line with what FMG has guided to for opex/capex (US$400/300m respectively) in FY26.
Connecting the dots, Macquarie has a 12-month price target of $16.50 on Fortescue shares. That's 14.6% below the current level. Though that doesn't include the two upcoming dividends.
What about the other ASX 200 iron ore giants?
While Macquarie doesn't have an outperform rating on any of the big three ASX 200 mining stocks, the broker looks to prefer BHP Group Ltd (ASX: BHP) shares and Rio Tinto Ltd (ASX: RIO) shares to Fortescue shares.
Macquarie has a neutral rating on BHP shares with a $42.22 price target. That's just below the $42.76 a share BHP is trading for this morning.
The broker also has a neutral rating on Rio Tinto shares, with a $123.20 price target. Rio Tinto shares are currently changing hands for $126.11 apiece.
