On Thursday, JPMorgan (NYSE:JPM) analyst Bill Peterson upgraded shares of Freeport-McMoRan (NYSE:FCX) from Neutral to Overweight, increasing the price target to $52.00 from the previous $48.00. Peterson’s upgrade is based on the anticipation of sustained premium pricing for Freeport’s US-based operations. The adjustment reflects a roughly 30% potential upside. The upgrade comes as the stock shows strong momentum, with InvestingPro data showing a 7.56% return over the past week. With a market capitalization of $58.09 billion and a P/E ratio of 31.26, FCX maintains its position as a prominent player in the metals and mining sector.
The analyst’s optimism is tied to the ongoing review by the Department of Commerce (DoC) into whether US copper imports present a national security threat, a process initiated by President Trump on February 25. Since the announcement, COMEX copper has maintained approximately a 10% premium over LME copper. This premium is expected to benefit Freeport’s US operations, which are projected to contribute around 10% of the company’s operating profit in FY24, and an even more significant 20% of post-tax earnings due to net operating losses (NOLs). InvestingPro analysis indicates the company maintains a strong financial health score of 2.97 (rated as GOOD), with robust operational metrics including $25.45 billion in revenue and $9.54 billion in EBITDA over the last twelve months.
Peterson noted that the current trade policies under the Trump administration suggest a likelihood of continued protectionism for US copper imports. However, even if protective measures are not implemented, Peterson believes that Freeport-McMoRan is still well-positioned to capitalize on near-term opportunities compared to its pure-play peers.
The review by the DoC has a deadline set for November 22, and its outcome could have a direct impact on Freeport’s financial performance. The analyst’s perspective is that the premium pricing, driven by tariff risks and long-term supply challenges, will create a favorable pricing environment for the industry over time. Freeport-McMoRan’s stock is expected to benefit from these developments, as reflected in the upgraded rating and price target.
In other recent news, Amarc Resources Ltd. released its interim financial statements for the nine months ending December 31, 2024. These filings provide an overview of the company’s earnings, expenses, and financial activities during this period. The documents were submitted to the United States Securities and Exchange Commission, ensuring transparency and compliance with regulatory requirements. In related developments, Jefferies has maintained its Buy rating on Freeport-McMoRan, with a price target of $48, citing a strong correlation between copper prices and the company’s stock performance. Additionally, Jefferies analyst Christopher LaFemina recently upgraded Freeport-McMoRan’s rating from Hold to Buy, citing positive developments in Indonesia and potential benefits from tariffs on U.S. copper imports. Meanwhile, BMO Capital Markets adjusted Freeport-McMoRan’s price target to $50 from $54, maintaining an Outperform rating. Despite increased capital expenditures anticipated in 2025 and 2026, BMO Capital remains optimistic about the company’s long-term prospects due to favorable copper market trends. These developments reflect ongoing interest and analysis in the mining sector, particularly concerning copper dynamics and regulatory changes.
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