** Jefferies marginally decreases price target on Australia's Fortescue FMG.AX to A$18.4 from A$18.5, reiterates "underperform" call

** The world's fourth largest iron ore miner on Thursday reported second-quarter shipments in line with Visible Alpha estimates

** Jefferies says unit costs of $19.1 were 6% above market consensus despite a lower strip ratio, or the amount of waste material that must be removed to extract ore

** Brokerage says lower strip ratio did not translate into decreased unit costs due to the lag effect of cost-of-sales reporting

** Adds while hematite production and shipments were largely in line with forecasts, Jefferies sees long-term upside appropriately priced in at this point of the cycle

** Fortescue shares flat on the day