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How Analysts See Copper Miners as Prices Stabilize

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Mar. 1 2019, Published 8:10 a.m. ET

Copper miners

The metals and mining space has seen a lot of turbulence over the last five years. In 2015, China’s slowdown concerns spooked commodity investors. The sell-off continued in the first quarter of 2016. However, things started to stabilize. China’s stimulus boosted its economy. President Trump’s election also boosted metals including copper.

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Copper prices

Copper prices continued their good run in 2017 because the global economy was growing at a strong pace. In 2018, copper prices fell sharply and frequently traded below $6,000 per metric ton in the second half of the year. In 2019, things have started to stabilize. On the demand front, China’s demand hasn’t been as weak as some observers were expecting. On the supply side, rain in Chile and the falling exchange inventory have brought copper’s positive supply-side fundamentals into the limelight. Mining companies (XME) have an optimistic view of copper and have been open to growth opportunities.

Analysts’ rating

The fourth-quarter earnings season is nearly over. Most leading copper miners including Freeport-McMoRan (FCX), Southern Copper (SCCO), and First Quantum Minerals (FM) have released their results. Usually, analysts revise their ratings and target prices following a company’s earnings release. In this series, we’ll see how analysts rate leading copper miners after their earnings and amid the improved outlook for copper prices.

First, we’ll discuss Freeport-McMoRan’s ratings and target prices.

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