Fortescue Ltd (ASX: FMG) shares have been on a tear since late June.
Shares in the S&P/ASX 200 Index (ASX: XJO) mining giant closed up 0.76% on Tuesday, trading for $22.57 apiece.
That sees the share price up a very impressive 55% since the recent closing lows of $14.54 posted on 23 June.
Taking a step back, Fortescue shares have gained 26% since this time last year. Atop those capital gains, the ASX 200 mining stock also trades on a fully-franked trailing dividend yield of 4.9%.
But looking ahead, the analysts at Jeffries expect that shareholders will be giving back some of those gains over the coming months.
Are Fortescue shares set to fall 18%?
The team at Jeffries recently downgraded Fortescue to an underperform rating from the prior hold rating (courtesy of The Bull).
Jeffries reduced its price target for the miner from $19.25 to $18.50. That's 18% below Tuesday's closing price, though it's still more than 27% above the recent June lows.
What's been happening with the ASX 200 mining stock?
A resilient iron ore price counts among the tailwinds helping to lift Fortescue shares over the past seven months.
At the end of June, the industrial metal was trading for around US$94 per tonne. On Tuesday, that same tonne was trading for around US$109.
Lower average iron ore prices in FY 2025 were reflected in Fortescue's full-year results covering the 12 months to 30 June.
Although Fortescue achieved record iron ore shipments in FY 2025 of 198.4 million tonnes (Mt), the company's revenue declined 15% year on year to US$15.5 billion. This was driven by an 18% decrease in Fortescue's average iron ore (hematite) revenue to US$85 per dry metric tonne.
On the bottom line, Fortescue's net profit after tax (NPAT) plunged 41% from FY 2024 to US$3.4 billion.
Although Fortescue shares closed down 3.9% on 26 August, the day the miner reported those results, a rebounding iron ore price saw investors rushing to buy the dip over the following weeks.
Those investors will have been vindicated following the release of Fortescue's record-breaking first-quarter (Q1 FY 2026) results, released on 23 October. That included all-time high quarterly iron ore shipments of 49.7 million tonnes, up 4% year on year.
The average price the miner received for its iron ore lifted to US$89 per dry metric tonne.
"Fortescue has delivered a strong start to FY26," CEO Dino Otranto said.
But if Jeffries has it right, now may be an opportune time to cash in some gains on Fortescue shares.
