Freeport-McMoRan Inc. (NYSE:FCX) shares are trading higher after BofA Securities analyst Lawson Winder upgraded the stock to Buy (from Neutral) with a price target of $59.
The bullish stance was due to expected higher quality copper leverage, robust and rising free cash flow, and material gold revenue (15% of the total).
Related: Will Copper Reach $10,000? ‘An Essential Metal That Faces An Uncertain Future’
Transition to Underground Mining
The analyst’s rating reflects the company’s successful transition to underground, block cave mining at Grasberg, more normalized copper production in the future and value-enhancing growth options, including low-grade leaching.
Positive Outlook on Metals
The BofA Commodities team is now materially more bullish on gold prices and gave a constructive outlook on copper given robust energy transition demand and constrained supply. The analyst estimates FY24 average price for gold to increase by 17% to $2,317 per ounce (/oz), silver to rise 14% to $26.5/oz, and copper to be higher by 8% to $9,321 per tonne (/t) or $4.23 per pound (/lb).
Also Read: Bank Of America Sees Gold At $3,000, Warns Of A Copper Supply Crisis: Metals ‘Dance To Their Own Tune’
Earnings Estimates
The analyst estimates EPS of $1.43 in FY24, $2.39 in FY25 and $2.45 in FY26 for the company.
Investment Opportunities
Investors can gain exposure to the stock via Exchange Traded Concepts Trust Optica Rare Earths & Critical Materials ETF (NYSE:CRIT) and VanEck Green Metals ETF (NYSE:GMET).
Current Price Action
Price Action: FCX shares are up 2.02% at $51.01 on the last check Tuesday.
Photo via Wikimedia Commons
Additional Insight:
It is important to note that investing in commodities and mining companies can be volatile due to fluctuations in metal prices and global economic conditions. It is crucial for investors to consider diversification and risk management strategies when investing in this sector. Additionally, keeping an eye on industry trends and government regulations that may impact production and prices can help investors make informed decisions.
