The Fortescue Ltd (ASX: FMG) share price has seen its fair share of ups and downs in the past year, as the chart below shows.
Miners' performance is highly dependent on their respective resource prices. Fortescue is currently dependent on the iron ore price.
The iron ore price has fallen below US$100 per tonne (from above US$110 per tonne in May). This means its profit has also likely taken a sizeable hit.
At this cheaper Fortescue share price – down 18% since mid-May – it'll be interesting to see what analysts think the business's returns could be.
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Potential Fortescue share price change
According to CMC Invest, there have been 11 ratings on the business within the last three months. Of those, two have been buy ratings, four have been hold ratings, and five have been sell ratings.
Each analyst rating comes with a price target, which tells investors where they think the Fortescue share price could be trading. The average price target on Fortescue from those 11 analyst ratings is $19.01. That implies a possible rise of 1% from where it is at the time of writing. Therefore, a $10,000 investment could translate into approximately $10,100.
However, a significant portion of the returns from Fortescue shares come from passive income in the form of dividends.
Passive income projection
The estimated payout for FY27 is expected to be lower than the FY26 payment. Currently, Commsec's forecast for the 2026 financial payout is 93.8 cents per share.
That translates into a dividend yield of 5% excluding franking credits and 7.1% including franking credits.
If we include the franking credits as part of the payout, an investor could receive $710 grossed-up dividend income.
Potential returns
Therefore, investing $10,000 today could lead to approximately of $100 capital gains and $710 income, for a total estimated return of $810 – an 8.1% return, if the analysts prove to be correct.
Considering the long-term return of the S&P/ASX 200 Index (ASX: XJO) has been a return of around 9% per year over the last decade or so, I think Fortescue's projected return is unlikely to noticeably outperform the index, unless the iron ore price performance is unexpectedly strong.
Therefore, there could be opportunities on the ASX that could perform better, in my view. I think Fortescue is a great operator, but I'd prefer to invest when there's more negativity about the iron ore sector. Sectors like retail and real estate generally look like a better buy to me right now.
