The Fortescue Ltd (ASX: FMG) share price could be one to watch over the next year, according to experts.
Oil and LNG prices are getting all of the attention right now, but the iron ore price is also making interesting moves. According to Trading Economics, the iron ore price reached US$106 per tonne at the end last week, which certainly gives the company room to make good profits.
Fortescue is one of the lowest-cost iron ore miners in the world, so any increase of the iron ore price largely adds to net profit (after paying more to the government).
In my view, the rising iron ore price is a key reason why the Fortescue share price has gone up around 20% in the last year, as the chart below shows.
Let's see where experts think the Fortescue share price will go in the next 12 months.
Image source: Getty Images
Price target
A price target tells us where analysts believe the valuation will be in a year from the time of the investment call.
According to CMC Invest, there are a mixture of ratings on the business right now – there's one buy rating, six hold ratings and three sell ratings. Despite that, the price target still implies positive returns for investors.
The average price target from those ten ratings is $20.40, which currently suggests potential capital growth of at least 7%, plus the possible dividends that the business could pay.
Here's why the Fortescue share price could rise
The latest note from broker UBS has a neutral rating on the ASX mining share, with a price target of $20.
Considering the current issues that are facing the world with diesel, Fortescue's efforts to roll out batteries, solar, wind and electric-powered vehicles is well-time because of reduction of reliance on external fuel (and decarbonisation).
UBS said that it "remains confident in FMG's approach to decarb spend". The broker noted that Fortescue is estimating that taking the diesel and gas costs out of C1 (production costs) to the tune of between US$2 per tonne to US$4 per tonne by 2030.
The broker's latest estimate for the iron ore price was US$96 per tonne in 2026 and US$90 per tonne in 2027 because of the ramp-up of Simandou.
It will be interesting to see if the big increase of the diesel price and reduced availability of the fuel leads to less iron ore supply globally, which could naturally lead to a higher iron ore price.
UBS currently estimates that Fortescue could make net profit of $3.8 billion in FY26, funding a possible dividend per share of A$1.22.
