Bernstein initiated coverage on Freeport-McMoRan (NYSE:FCX) with a Market Perform rating and a price target of $41.00, noting it strongly believes in the long-term potential of copper and sees the company as an intriguing "copper barbell" opportunity.
According to the firm, Freeport has one of the world's largest mines, Grasberg in Indonesia, which produces copper "for free", offering stability, cash flow, and returns.
Bernstein also highlighted Freeport’s suite of higher cost Americas-based mines that provide beta to price and the upside opportunity for regeneration.
Considering the current copper prices nearing $9,000/t and reasonable copper equity multiples, Bernstein suspects it will find a better entry point.