How Analysts See Copper Miners after 3Q17

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How Analysts See Copper Miners after 3Q17 PART 1 OF 6

How Analysts Are Rating Copper Miners after Their 3Q17 Results

Copper miners

We’re now reaching the end of the 3Q17 earnings season, and most mining companies have already released their quarterly financial performance. Leading diversified miners Glencore (GLEN-L) and BHP Billiton (BHP) have only provided their quarterly operating performances.

How Analysts Are Rating Copper Miners after Their 3Q17 Results

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Price action

Overall, 2017 has been a strong year for companies in the metals and mining space (XME). Metals have built on their 2016 gains, and commodities including copper and aluminum have moved to higher price levels. Higher commodity prices have boosted mining companies’ price action.

Mining companies seem to have put the worst behind them, and after cutting back on capital expenditure for the last couple of years, miners have again opened their purses for new exploration activity. However, there are some exceptions.

Freeport-McMoRan’s (FCX) 2017 returns have trailed other copper miners, including those of Southern Copper (SCCO). FCX has also underperformed copper this year. Freeport’s underperformance could be largely attributed to concerns over its Grasberg mine.

In August, Freeport announced a framework with the Indonesian government, but it lacked crucial details, especially over the valuation. (You can read Why Freeport Investors Will Likely Postpone the Celebration for a detailed analysis of Freeport’s framework with Indonesia.)

Series overview

Generally, analysts reassess their recommendations and target prices following a company’s earnings release to reflect the earnings and guidance provided by a company’s management. In this series, we’ll analyze how analysts are rating different copper mining companies after their 3Q17 results.

We’ll begin in the next part (below) by looking at Freeport’s ratings and target prices.


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