Fortescue Ltd (ASX: FMG) shares are down around 1% to $16.65 on Thursday morning.
The decline means the miner's shares are now down around 24% year to date.
For context, the S&P/ASX 200 Index (ASX: XJO) is down 1% today and around 1% for the year-to-date.
It's been a tough couple of months for the global mining giant. After its shares hit a two-year high of $22.99 in May, they've slowly but gradually tumbled downwards.
Just last week, Fortescue shares hit an annual low of $16.22 a piece.
Fortescue's shares were hit by headwinds from iron ore prices. The company generates substantial cash flow from its large iron ore operations, so rising iron ore prices act as a tailwind and falling prices act as a headwind for the miner's shares.
Trading Economics data shows that iron ore prices spiked to around US$111 per tonne in May, hit an annual low of around US$93 per tonne in August, and are currently trading at around US$97 per tonne.
Ongoing conflict in the Middle East has also put downward pressure on shares, driven by concerns about rising costs, oil supply risks, and broad market uncertainty.
A mixed FY26 result last month, including a 9% increase in revenue, 9% increase in EBITDA, and a 15% decrease in statutory net profit after tax (NPAT), didn't help the share price either.
The question now is, where will the shares go next?
Here's what the experts think.
Image source: Getty Images
What do brokers tip for Fortescue shares?
Analyst forecasts are a mixed bag.
Market Index data shows brokers are divided equally among buy, sell and hold ratings. The $18.66 average target price implies around an 11% upside, at the time of writing.
On TradingView, the majority of analysts (10 out of 16) have a hold stance on Fortescue shares. Another four rate the shares as a sell/strong sell, and two rate them as a strong buy.
The average $17.59 target price implies a potential 6% upside ahead. Although some think the shares could jump another 32% to $22.01 over the next 12 months, at the time of writing.
Joshua Baker from RaaS Group has a sell rating on the ASX mining shares and warns that the outlook for iron ore prices isn't as appealing as other commodities.
The team at Morgans have a hold rating on Fortescue shares. The broker said that with the focus on FY27 guidance, Iron Bridge remains a key issue. It explained that the magnetite operation is struggling through ramp-up and with elevated costs. Elsewhere, Morgans said the miner's plans for a green steel plant are difficult to quantify.
What could drive Fortescue shares higher this year?
An iron ore price recovery would obviously help to drive the shares higher over the next 12 months, as would any progress on its green steel plant.
Fortescue is also actively diversifying its business beyond iron ore and into other markets, such as copper and renewable energy, which could reduce its reliance on iron ore over the long term and also strengthen its bottom line.
