Freeport-McMoRan Inc. Soars on Analyst Upgrade Amid Copper and Gold Market Optimism

Key Points

• Freeport-McMoRan Inc. (FCX) receives a stock upgrade to Buy from Neutral by BofA Securities with a price target of $59.
• The upgrade is based on anticipated benefits from the copper and gold market boom, with projections of increased gold prices to $2,317 per ounce and copper to $9,321 per tonne in FY24.
• The positive outlook for Freeport-McMoRan is part of a broader bullish sentiment in the commodities market, with significant implications for investors.

In this news

In a significant development for Freeport-McMoRan Inc. (FCX), shares of the mining giant have seen an uptick following an upgrade from BofA Securities. Analyst Lawson Winder elevated the company's stock from Neutral to Buy, setting a price target of $59. This optimistic forecast is rooted in the anticipated boom in copper and gold markets, with Freeport-McMoRan poised to benefit from higher quality copper leverage, an increase in free cash flow, and substantial gold revenue, which constitutes 15% of its total revenue. The upgrade reflects the company's successful shift to underground, block cave mining at Grasberg, expectations of more normalized copper production ahead, and the potential for value-enhancing growth through low-grade leaching.

The backdrop to this bullish outlook includes a broader positive sentiment in the commodities market, particularly for gold and copper. The BofA Commodities team has expressed a materially more optimistic view on gold prices and a constructive outlook on copper, citing robust demand for energy transition and a constrained supply scenario. The analyst's projections for FY24 include a 17% increase in the average price for gold to $2,317 per ounce, a 14% rise in silver prices, and an 8% hike in copper prices to $9,321 per tonne. Such forecasts underscore the potential for significant revenue growth for Freeport-McMoRan in the coming years.

The broader implications of these upgrades and price forecasts are substantial for investors and the market at large. With Bank of America also projecting gold to reach $3,000 per ounce by 2025 and warning of a potential copper supply crisis, the stage is set for a potentially lucrative period for commodities, particularly for key players like Freeport-McMoRan. As the company's shares continue to respond positively to these developments, the future looks promising for Freeport-McMoRan and its stakeholders, with significant exposure to the stock available through various ETFs such as the Exchange Traded Concepts Trust Optica Rare Earths & Critical Materials ETF (NYSE:CRIT) and the VanEck Green Metals ETF (NYSE:GMET).