United Homes Group stock plunges after Nikki Haley, directors resign
Investing.com -- HSBC upgraded Freeport-McMoRan to Buy from Hold and lifted its price target to $50 from $43 amid stronger copper and gold prices that should support earnings even as the miner grapples with operational disruptions at its flagship Grasberg mine in Indonesia.
Copper has outperformed other base and bulk metals this year on supply disruptions, with precious metals also hitting multi-decade highs.
HSBC said Freeport is well positioned to benefit from the price environment and noted the stock’s recent underperformance.
Grasberg, which accounts for about 3% of global copper supply and is central to Freeport’s earnings, has been under force majeure since a deadly mud rush in September.
HSBC cut its production forecasts for later years, expecting only a gradual ramp-up, but said higher metals price assumptions more than offset the revisions.
Other analysts have also flagged that risks on Grasberg is overstated.
Citi described Freeport as “a rare opportunity to buy into the world’s largest copper miner at a discount,” saying Grasberg’s problems are not structural and output should recover.
Bernstein argued the market has been too harsh on Freeport after the incident.
HSBC’s valuation is based on a mix of discounted cash flow and EV/EBITDA multiples, producing a blended target of $50 per share, implying nearly 17% upside from current price of $41.
Downside risks include weaker-than-expected metals prices, delays at Grasberg, and regulatory challenges in Indonesia and the US.