Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Is FMG poised to beat its FY20 guidance?

We examine Fortescue’s recent market update as well as look at why Macquarie thinks the iron ore giant could be set to beat its full-year guidance.

FMG share price in focus Source: Bloomberg

Fortescue Metals Group (FMG) yesterday announced a number of measures that the company would be taking to combat the spread of the coronavirus (Covid-19).

Centrally, as part of that market update, FMG’s Chief Executive, Elizabeth Gaines said:

'The health and safety of the entire Fortescue family is our highest priority and we take our responsibility as a large employer seriously.'

In line with such thoughts, some of the Covid-19 measures FMG has implemented include: roster changes to reduce unnecessary travel between work sites; the requirement for office-based roles, non-critical site-based roles and high risk employees to work from home; and the introduction of various social distancing and hygiene practices.

Moreover, although the coronavirus pandemic has forced many companies to rethink how they do business, even with this disruption, Fortescue yesterday indicated that it remains on track to meet its previously stated full-year guidance.

'While COVID-19 has brought uncertainty and volatility to global markets, including the iron ore market, Fortescue's shipments continue from Port Hedland as scheduled. Our mining, processing and shipping activity remains in line with our guidance for FY20 of shipments towards the upper end of our guided range.’

There will be some disruptions however, with Ms Gaines pointing out that both FMG’s local and international exploration activities have been put on hold; though the mining giant’s Eliwana Mine and Rail and Iron Bridge Magnetite projects continue to progress.

FMG share price: is a guidance beat coming?

In short, according to Macquarie analysts, that is the current expectation.

Specifically, Macquarie flagged that their port data currently ‘suggests that FMG could deliver a modest beat to FY20 guidance, after strong shipping over the last month.'

Macquarie further elaborated that a weak Aussie dollar and depressed oil prices put FMG in a strong position to beat on cash costs for the full-year.

‘We expect FMG’s C1 cash costs to come in at US$12.27/wmt, 4% below the bottom end of the cost guidance range,’ the investment bank argued.

Such an outcome would only bolster Fortescue’s claim to being one of the lowest cost producers in the world.

The FMG share price last traded at $10.24 per share.

How to trade FMG

What are your thoughts on Fortescue: is a beat coming or will the miner disappoint? Either way, you can trade any of Australia's big three miners – both up and down – through IG’s world-class trading platform today.

For example, to buy (long) or sell (short) FMG using CFDs, follow these easy steps:

  • Create an IG Trading Account or log in to your existing account
  • Enter ‘Fortescue Metals Group’ or ‘FMG’ in the search bar and select it
  • Choose your position size
  • Click on ‘buy’ or ‘sell’ in the deal ticket
  • Confirm the trade

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.