Citi upgrades Freeport on copper price boost, says Grasberg selloff overdone

Published 08/10/2025, 14:28

Investing.com -- Citi upgraded Freeport-McMoRan to Buy from Neutral, on expectations for copper prices to climb to $12000 per ton in the first half of 2026 and saying the stock’s sharp pullback after the Grasberg mine accident offers an attractive entry point.

Citi raised its copper forecasts on the back of tight supply, resilient demand and macro support from expected U.S. rate cuts and a weaker dollar.

Analysts at Citi called Freeport “a rare opportunity to buy into the world’s largest copper miner at a discount,” saying that Grasberg’s issues are not structural and production should ultimately recover safely.

Freeport shares have underperformed peers by about 40% since the September accident, when a wet material rush at the Indonesian mine killed two workers and halted operations.

Grasberg is central to Freeport’s earnings and accounts for about 3% of global copper supply, which explains the recent jump in copper prices

Analysts said their discussions with mine experts and management suggest water management changes will be needed, but the ore body itself remains intact. UBS and Bernstein have also said market fears of a lasting impairment are overstated.

Citi kept its $48 price target, assuming $10,000 copper and about $5 billion in Grasberg-related impairments.

The firm said Freeport trades below 1x net asset value for the first time in years and offers upside as Grasberg recovery plans progress and copper prices strengthen.

The bank also expects Freeport’s U.S. operations to add about 250,000 tons of copper capacity and lower costs by 50 cents per pound.

Even with a slower-than-guided recovery at Grasberg, Freeport should outperform as copper tightness deepens.

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