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UBS raises Freeport-McMoRan shares target on copper rally

EditorEmilio Ghigini
Published 05/14/2024, 07:32 AM

On Tuesday, UBS has increased the price target for Freeport-McMoRan (NYSE:FCX) shares, a major mining company, to $54.00 from the previous target of $41.00, while maintaining a Neutral rating on the stock.

The adjustment comes in response to a significant rally in the copper market, which has been largely attributed to growing concerns over supply, particularly regarding the availability of copper concentrate.

The firm notes that the positive shift in the copper market is also supported by expectations of improved global industrial production momentum, with Purchasing Managers' Indexes (PMIs) indicating a move towards modest growth.

UBS has revised its earnings estimates for Freeport-McMoRan upward, factoring in not only the anticipated higher medium-term copper prices but also an increase in gold values.

UBS forecasts copper prices to reach $4.50 per pound in 2025, slightly below the current spot price of $4.65 per pound, and to rise to $4.75 per pound in 2026. The bank's projections for Freeport-McMoRan's financial performance are robust, with an expected consolidated EBITDA of $12 billion in 2025 and $13 billion in 2026.

On the basis of economic interest, UBS anticipates that Freeport-McMoRan will generate free cash flow (FCF) of approximately $3.8 billion in 2025. This projection is part of the firm's broader analysis of the company's financial outlook in light of the evolving dynamics in the copper market.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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