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.
Macquarie cut the price target of Freeport-McMoRan Inc (NYSE: FCX) to $10 from $13 following its sale of its Gulf of Mexico business to Anadarko Petroleum Corporation (NYSE: APC) and expectations of near-term weakness in copper prices.
"While we like the strategy in reducing its energy exposure and eventually returning to a pure-play copper company, we struggle with the amount of cash that was harvested, relative to the amount of EBITDA that was sold," analyst Anthony Young wrote in a note.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
"While APC indicates a multiple of 1.5x EBITDA using the forward strip, using a flat oil price for 2017, we believe that this multiple is closer to 3.5x," Young continued.
However, the analyst welcomed FCX move to diversify from energy and focus on its mining operations, which is the company's core strength. The Anadarko deal is expected to cut FCX's energy exposure by about 70 percent, and the analyst expects FCX to exit its remaining energy business over the next 12-18 months.
In addition, the sale will improve the balance sheet of FCX as it will bring total 2016 asset sales to just over $6 billion, and Young expects the company to pay down an additional $1.4 billion in debt following its completion.
"We anticipate net debt-EBITDA will fall to roughly 3-to-1 by year-end 2017," Young noted.
While maintaining a Neutral rating on FCX, Young said the recent deal will make the shares more attractive to metals and mining focused investors.
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.