2024-03-19 15:06:02 ET
Summary
- With the copper's future now priced at $4.11 per lbs, higher than FCX's FY2023/ FY2022 average realized prices, the miner may be able to report improved top/ bottom lines ahead.
- Copper futures may further rally as well, as the total net long position in the Commodity Futures Trading Commission reverses positively, implying higher spot prices ahead.
- The current spot prices may potentially trigger FY2024 adj EBITDA of over $10B (+13.6% YoY), if not more, as the management guides flattish unit net cash costs.
- With analysts still expecting copper prices to "soar more than +75% over the next two years," we believe that the FCX stock may similarly rally along with higher variable dividend payouts.
- As a result of the relatively attractive risk/ reward ratio, we are maintaining our Buy rating for the FCX stock.
We previously compared Freeport-McMoRan ( FCX ) in December 2023, discussing why we finally rerated the stock as a Buy, attributed to the higher copper spot prices, expanded production volumes, and lower operating costs by 2024, likely to boost the miner's near-term top and bottom lines....
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For further details see:
Freeport-McMoRan's Electrification Story Boosted By Mine Closure & Future's Rally