On Tuesday, analysts at Bank of America upgraded mining company Freeport-McMoran Copper & Gold Inc. (FCX) due to its attractive valuation.
The analysts upgraded FCX from “Neutral” to “Buy” with a new price target of $39, up from the previous price objective of $38. The new valuation suggests a 24% upside to Tuesday’s closing price of $31.54.
A Bank of America analyst commented, “Copper is often seen of as the bellwether commodity, for the mining sector, for and in China and for the wider economy. We believe that copper has interesting supply demand fundamentals in the medium term. Our commodities team has previously written that, we could see as much as a 6 Mtpa deficit in the copper market by 2020. Of course, copper is only a 20 Mt per year market so a deficit of this size is not possible, rather price rationing would keep the market in balance and to us speaks to the potential for strong prices for years to come.”
Since FCX is one of lowest-cost copper producers in the world, Bank of America’s view on the commodity lays the foundation for its bullish view of Freeport-McMoran shares.
Freeport-McMoran shares were up 41 cents, or +1.30%, during pre-market trading on Wednesday. The stock is down -24.96% over the past twelve months.
The Bottom Line
Shares of Freeport-McMoran (FCX) have a dividend yield of 3.96% based on last night’s closing price of $31.54 and the company’s annualized dividend payout of $1.25 per share.
Freeport-McMoran Copper & Gold Inc. (FCX) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.