Itâs a good day to be invested in Fortescue Metals Group Limited (ASX: FMG) shares. Or, at least, it was.
The stock soared 0.9% earlier this morning to ink a new 52-week high of $23.12. Thatâs the highest itâs been in 17 months.
However, the iron ore giant’s notable gains didn’t last. The Fortescue share price has slipped to trade at $22.91 at the time of writing, 0.04% lower than its previous close.
For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 0.88% at the time of writing while the S&P/ASX 200 Materials Index (ASX: XMJ) is up 0.76%.
So, what might be going on with Fortescue shares today? Letâs take a look.
What’s going on with Fortescue shares today?
Fortescue popped to long-forgotten heights before dropping to near its previous close on Friday morning amid Goldman Sachsâ backhanded outlook.
The top broker today said it saw the ASX mining sector as âmore fairly valuedâ amid Chinaâs reopening.
It also noted it wouldnât be surprised if share prices in the sector retraced this quarter but was expecting big things for miners in the second half of this year as commodity prices recovered.
That sounds like good news for Fortescue shares, right? Unfortunately not. The stock has been downgraded by the broker.
Goldman Sachs is bearish on the iron ore giant, saying spending on decarbonisation will likely take its toll on the companyâs bottom line and future dividends.
The broker now has a $13.40 price target on Fortescue shares â representing a potential 41% downside.
Itâs also worth noting the stock has been on a roll this week. Even considering todayâs slump, the company’s share price is still 5% higher than it ended last week.
Thatâs despite the companyâs chief financial officer handing in his resignation on Monday. Ian Wells is just the latest executive to walk away from the ASX 200 giant.
The post Why did Fortescue shares just crack a new, 52-week high? appeared first on The Motley Fool Australia.
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More reading
- Goldman tips Fortescue share price to crash 42%
- 5 things to watch on the ASX 200 on Friday
- Here are the top 10 ASX 200 shares today
- Fortescueâs Twiggy Forrest is in the wars this week. Hereâs why
- Hereâs why 2023 will be a huge year for passive income
Motley Fool contributor Brooke Cooper 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 Scott Phillips.
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