excerpt from this article:...

excerpt from this article:

https://www.marketindex.com.au/news/fortescue-drops-green-hydrogen-target-is-this-a-good-outcome-for

seems earnings up/div up as expected given the H2 partial reversal



Forecast earnings, dividend up
The lower corporate overhead costs, slowdown of Fortescue Energy spend and a simplified corporate structure translates to a respective 20% and 16% bump in FY25 and FY26 earnings estimates, according to Macquarie. The EPS outlook for FY27 and beyond was also lifted by 5-7%.

The analysts upgraded their target price by 16% to $14.50 but retained a Sell rating.

"Whilst positive for earnings and free cash flow, we recognise the short-term sugar hit to dividend yields may be received well by investors looking to harvest fully franked returns," the analysts said.

"However, ETFs seeking hydrogen exposure or long only's with strong energy transition mandates may seek to reduce positions on these developments."

Fortescue has historically traded at a 20% multiple discount to peers like BHP and Rio Tinto. In the past two years, Fortescue has managed to close this valuation gap due its green hydrogen aspirations – But without it, this premium may come under pressure.