The Fortescue Metals Group Limited (ASX: FMG) share price has continued to climb throughout the month of December.
In the past 30 days, the iron ore producer’s shares have raced 12.5% higher in value. This puts the company as one of the stronger performers on the S&P/ASX 200 Index (ASX: XJO).
At Thursday’s closing bell, the Fortescue share price finished the day down 0.73% to $19.14.
What’s the latest with Fortescue?
There are a number of reasons that have caused Fortescue shares to rise in recent times.
The price of iron ore has accelerated, reaching US$113.50 a tonne at the time of writing. This is in sharp contrast to when the steel-making ingredient traded as low as US$90 a tonne in mid-November.
News that energy behemoth AGL Energy Limited (ASX: AGL) will team up with green energy-focused Fortescue Future Industries has excited investors. The AGL and Fortescue share price both climbed on the news.
The companies have entered into a Memorandum of Understanding (MOU) to develop a hydrogen hub for the Hunter Valley coal plants. Namely, this relates to the Liddell and Bayswater coal-fired power stations, with AGL planning to transform the sites.
The Liddell coal-fired power station is scheduled to close down in 2023, with Bayswater going offline in 2025.
Notably, Fortescue boss, Andrew “Twiggy” Forrest will be involved with the development, which will consist of a 12-month feasibility study.
What do the brokers think?
This month, a couple of brokers rated the company’s shares with varying price points.
Leading Australian investment firm Morgans raised its 12-month price target by 30% to $16.90 for Fortescue shares.
However, JPMorgan had a more bearish tone, downgrading its outlook on the Fortescue share price to “neutral” from “overweight”. The broker also slashed its rating by 9.1% to $20.00 apiece.
Based on the current share price, this still implies an upside of around 4% for investors.
About the Fortescue share price
Up until the end of July, Fortescue shareholders were enjoying strong gains, hitting an all-time high of $26.58 apiece. That all came crashing down in the following months, with its shares touching a low of $13.90 in October.
Compared to this time last year, Fortescue shares are down 18%.
On valuation metrics, Fortescue commands a market capitalisation of roughly $58.93 million, and has more than 3.08 billion shares on issue.
The post Here’s why the Fortescue (ASX:FMG) share price has leapt 12% in December appeared first on The Motley Fool Australia.
Should you invest $1,000 in Fortescue right now?
Before you consider Fortescue, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Fortescue wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
More reading
- Top brokers name 3 ASX shares to sell
- The ASX share market coverage that captivated readers in 2021
- This week, Fortescue (ASX:FMG) produced its own hydrogen for the first time. What does this mean?
- What are experts saying to expect for ASX hydrogen shares in 2022?
- 5 things to watch on the ASX 200 on Thursday
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/3pFulqy
Leave a Reply