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On Thursday, Jefferies analyst Christopher LaFemina upgraded Freeport-McMoRan stock, listed on the New York Stock Exchange (NYSE:FCX), from Hold to Buy, raising the price target to $48.00 from the previous $40.00. LaFemina cited recent positive developments in Indonesia and the potential advantages for Freeport-McMoRan from tariffs on US copper imports as reasons for the upgrade. The new target represents significant upside potential for the prominent metals and mining player, which currently has a market capitalization of $54.5 billion and maintains strong financial health according to InvestingPro analysis.
The analyst had previously downgraded Freeport-McMoRan stock last month, pointing to various concerns. Risks in Indonesia, a cautious stance on the copper market, and the company’s anticipated lack of free cash flow in the short term were among the reasons for the downgrade. At that time, LaFemina’s outlook suggested that Freeport-McMoRan’s shares would likely remain range-bound throughout the year, with a breakout expected in 2026 when copper fundamentals were forecasted to improve. Despite these concerns, InvestingPro data shows the company generated $2.35 billion in levered free cash flow over the last twelve months, with a healthy current ratio of 2.42 indicating strong liquidity.
However, the recent updates regarding the situation in Indonesia appear to have alleviated some of the concerns that led to the initial downgrade. LaFemina’s revised stance reflects a more optimistic view of the company’s near-term prospects.
The potential impact of tariffs on US copper imports was also a significant factor in the decision to upgrade the stock rating. According to LaFemina, these tariffs could provide a considerable benefit to Freeport-McMoRan, a leading miner of copper.
Freeport-McMoRan’s stock price is likely to respond to these changes in analyst perception, as market participants digest the updated information and adjust their positions accordingly. The new price target of $48.00 represents a notable increase from the previous target, suggesting Jefferies’ confidence in the company’s future performance.
In other recent news, Freeport-McMoRan reported its third-quarter 2024 earnings, surpassing earnings per share (EPS) expectations with an EPS of $0.31, compared to the anticipated $0.25. However, the company fell short on revenue forecasts, reporting $5.72 billion against a projected $6.01 billion. Meanwhile, Jefferies downgraded Freeport-McMoRan’s stock from Buy to Hold, reducing the price target to $40, citing operational challenges in Indonesia and increased capital expenditures affecting free cash flow. In contrast, BMO Capital Markets maintained an Outperform rating for Freeport-McMoRan, although it lowered the price target to $50 due to anticipated higher capital expenditures in the coming years.
Additionally, President Donald Trump announced a commerce probe that could lead to tariffs on copper imports, potentially benefiting domestic producers like Freeport-McMoRan. This investigation aims to address global competition and support U.S. copper production. Commerce Secretary Howard Lutnick emphasized the significance of copper for national industries and defense. These developments come as Freeport-McMoRan navigates various operational dynamics, with analysts keeping a close watch on its performance and market conditions.
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