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Freeport-McMoRan Inc (NYSE:FCX) has completed another “transition year” in the move to underground mining at its giant Grasberg mine in Indonesia and this key asset seems poised for full contribution both for copper and gold production, according to Bank of America.
The Analyst
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BofA’s Timna Tanners upgraded Freeport-McMoRan from Neutral to Buy while raising the price target from $10 to $14.
The Thesis
With a successful underground and block cave mining transition, Freeport-McMoRan is likely to achieve higher production, lower costs, greater byproduct credits from gold and the normalizing of its capital expenditure, Tanners said in the note.
Recent weakness in copper prices seems to have pushed out project timelines and the company has limited large capacity planned for the near term, the analyst mentioned. She added, however, that copper prices are likely to move higher going ahead, with labor disruptions in Peru and Chile.
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Tanners added that a relatively strong CTFC (Commodity Futures Trading Commission) short position and chances of the trade war reaching a resolution could support copper prices.
She wrote in the note, “We think execution risk is somewhat priced in, and upside to copper prices make valuation compelling, in our view.”
Price Action
Shares of Freeport-McMoRan closed down 1.81% at $10.84 Wednesday.
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Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.