According to consensus estimates compiled by Thomson Reuters, Freeport-McMoRan (FCX) has a mean one-year price target of $13.14. This represents a 4.8% downside over its December 23, 2016, closing price.
Of the 20 analysts surveyed by Thomson Reuters, only three rate Freeport-McMoRan’s stock as a “buy” or equivalent, while four analysts rate it as a “sell” or equivalent. An overwhelming majority of analysts rate Freeport as a “hold.”
What’s changed since the election results?
Many analysts have raised Freeport’s target price over the last month as copper has moved to higher price levels following Donald Trump’s election. On October 23, Freeport had a mean one-year price target of $10.97. However, while analysts have raised their target prices, there haven’t been many changes in their recommendations.
For instance, on October 23, four analysts rated Freeport as a “buy” or equivalent, while three analysts rated the stock as a “sell” or equivalent. These ratings were similar to analysts’ post-election consensus recommendations.
Wall Street was bearish on Freeport-McMoRan and other copper producers at the beginning of the year. However, a combination of rising commodity prices (DBC) and improved “risk-on” sentiment boosted miners such as Teck Resources (TCK) and Rio Tinto (RIO) (TRQ).
Copper prices have risen ~16.9% YTD (year-to-date), with sentiments improving considerably since the beginning of the year, when prices looked set to breach their 2009 lows. Copper prices rose after Trump won the US presidential election, but we saw them gain strength even before the election. Copper miners have also moved to higher price levels, tracking copper prices.
In the next article, we’ll see how analysts are rating Southern Copper (SCCO).