Fortescue Metals Group (ASX: FMG) shares have faced a turbulent 12 months, with everything from fluctuations in iron ore prices and adverse weather impacting its performance.

Shares in the iron ore major are down more than 41% in the past year, settling at $15.08 apiece after Thursday's trade.

But is it all doom and gloom for Fortescue? Perhaps not. Analysts at Macquarie upgraded the iron ore miner in a recent note to clients. Why is the broker more positive on the stock? Let's dive in.

Fortescue shares upgraded to hold: Macquarie

With Fortescue shares trading around their yearly lows, Macquarie analysts see value in the beaten-down stock.

The bank's latest research on ASX diversified miners was positive on Fortescue's Q2 FY25 numbers, with shipments largely in line with its internal targets.

However, a few key developments could impact its future performance. In terms of iron ore shipments, Fortescue saw a 6% decrease, with 46.4 million tonnes (mt) shipped, which was 1% behind market consensus.

Looking forward, the broker reckons Fortescue will hit analyst estimates on iron ore shipments.

While FMG's shipping performance has higher volatility compared to its peers, we note the miner's shipments remained largely in line with seasonally adjusted target levels for 3QFY25 despite adverse weather conditions. We forecast FY25E shipments of 193mt, which is close to the mid-point of the guided range of 190-200mt. We note the widened range potentially reflects Iron Bridge ramp-up variability, with ramp up issues compounded with the air classification unit issues reported at the previously quarterly

Macquarie's rating for Fortescue shares has shifted from sell to neutral, with a price target of $15.30. This represents around 1.5% upside potential, excluding dividends.

What's next?

The upgrade from Macquarie indicates sentiment might be turning more positive on Fortescue shares.

But for this to be the case, we'd need a surge in iron or prices or for the iron ore giant to confirm a large uptick in volumes to be shipped.

The consensus of analyst estimates also rates it at hold right now, according to CommSec, with four brokers saying to buy, eleven at hold, and two with a sell rating.

Meanwhile, Goldman Sachs also reckons Fortescue is better placed than it was toward the end of 2024. It, too, upgraded the iron ore major in a note to clients this week.

It made the upgrade based on "relative valuation" and current demand for Fortescue's lower-grade iron ore, known as "low grade 58% Fe." (Fe is the chemical symbol for iron ore).

While there are challenges ahead, both Goldman and Macquarie agree that Fortescue's ability to adjust operating costs and manage its business in a fluctuating market will be key to its performance over the next year.

Foolish takeaway

Fortescue shares have fallen significantly in the past year, but Macquarie has just changed its rating on the iron ore major. It is joined by the majority of brokers covering the stock in this rating.

Does this automatically suggest that the stock is nearing a bottom? Impossible to tell. But the comments are certainly worth noting for those with Fortescue currently on their watch lists.

The stock is down 17% this year to date.