Morgan Stanley Upgrades Freeport-McMoRan On Coming Higher Copper Prices

Shares of mining company Freeport-McMoRan Inc. FCX rose after Morgan Stanley upgraded its rating on the company.

The Analyst

Morgan Stanley analyst Piyush Sood upgraded the stock to Overweight from Equal-Weight, while lowering the price target to $14 from $16.

The Thesis

The price of copper is going up thanks to demand in China and falling global production.

Morgan Stanley said it expects copper prices could go to around $3.12 a pound by year’s end, a double-digit percentage point increase over spot prices of $2.75.

“We believe (FCX) will emerge as the go-to large-cap stock for exposure to a copper price rally,” Sood wrote in the note.

Sood noted concerns about Freeport’s ability to deliver a production ramp-up to meet demand but said those concerns are overblown and that it will likely deliver its mining plans, especially starting in 2020.

Price Action

Freeport-McMoRan shares closed Wednesday higher by 6.9 percent at $12.29.

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