16.35 +0.05 (0.31%)
After hours: 7:48PM EDT
|Bid||16.28 x 1100|
|Ask||0.00 x 1100|
|Day's range||16.11 - 16.43|
|52-week range||11.12 - 20.25|
|PE ratio (TTM)||10.38|
|Earnings date||23 Jul 2018 - 27 Jul 2018|
|Forward dividend & yield||0.20 (1.18%)|
|1y target est||19.18|
Global trade war fears have reignited this month. Last month, after a second round of trade talks, the United States (DIA) and China decided to put the talks on hold. However, this month, we’ve seen an escalation in trade tension. Along with the US-China trade spat, we’ve seen an escalation in US trade friction with NAFTA countries and the European Union after Donald Trump opted not to extend their Section 232 exemptions.
While commodities tend to follow demand-supply dynamics in the long term, according to some observers, copper prices (DBC) (RIO) also tend to reflect macro developments. Although both bullish predictions may have carried some weight then, trade war fears have refused to die down despite US-China trade talks. With the two sides upping the ante in the trade war, geopolitically sensitive copper has come under pressure.
US-based copper miner Freeport-McMoRan (FCX) has seen selling pressure over the last two weeks. It reached its high this month, $18.20, on June 6. However, it has come under pressure since then and has fallen for the last five trading sessions.
Last week, President Trump imposed tariffs on $50 billion worth of goods from China. Broader equity markets closed with a marginal loss on June 15 after the tariffs were announced. The SPDR Dow Jones Industrial Average ETF (DIA) lost 0.35% on the day.
Among the analysts polled by Thomas Reuters on June 12, five analysts rated Antofagasta (ANTO) stock as a “strong buy,” three analysts rated it as a “buy,” six analysts rated it as a “hold,” and eight analysts rated it as a “sell.”
Is It Time to Fall in Love with Copper Stocks? Freeport-McMoRan (FCX) has received a “buy” or higher rating from nine analysts, while three analysts rated it as a “sell.” The stock doesn’t have any “strong sell” ratings. Among the analysts polled by Thomas Reuters on June 12, 11 or 48% of the analysts rate the stock as a “hold” or some equivalent.
We’re getting towards the end of the second quarter. Early in 2018, copper was rangebound. However, we have seen a spike in copper prices due to concerns about labor action at BHP Billiton’s (BHP) Escondida mine. Notably, Escondida is the world’s largest copper mine followed by Freeport-McMoRan’s (FCX) Grasberg mine.
China is making another big bet on copper in the Democratic Republic of Congo, deepening its presence in a country that’s proved very difficult for Western business. Congo holds huge reserves of copper, but is also one of the hardest countries to navigate -- with problems with security, transparency and infrastructure. A case in point is Glencore Plc, the biggest producer of copper in Congo.
In the past few years, global metal markets have been discussing the slowdown in China’s metal demand and how it could impact metal prices. As China (FXI) transitions from an investment-driven to a consumption-driven economy, its metal appetite has taken a breather. China is the world’s biggest copper importer. Copper mining is concentrated in Latin America.
Freeport-McMoRan: Should You Give Up on It after a 20% Rally? As we saw in the previous part of this series, Freeport-McMoRan (FCX) has bounced back over the last month amid higher copper prices and improved market sentiment. In this part, we’ll look at some of the risks Freeport could face in the short term.
Freeport-McMoRan: Should You Give Up on It after a 20% Rally? As noted in the previous part of this series, Freeport-McMoRan (FCX) has rallied significantly over the last month. Another copper miner, Southern Copper (SCCO), has risen 12.2%.
Freeport-McMoRan (FCX) has been having a strong run since May. In April, it had a selling spree, especially after its first-quarter earnings call. The company not only missed its earnings estimate but also lowered its 2018 production guidance while raising its unit cash cost guidance for the year. Southern Copper (SCCO) also lowered its 2018 production guidance, and BHP Billiton (BHP) narrowed its fiscal 2018 copper production guidance.
The discharge of what are called tailings, the leftovers of mineral extraction, is perfectly legal under Freeport’s current contract with the government. It shouldn’t have been a surprise, really, considering most every other miner in the world has been forced or has elected to stop discarding tailings in rivers. Freeport, though, has said that won’t happen at Grasberg.
In this part of our series, we’ll look at copper miners’ first-quarter free cash flows and look at the 2018 cash flow guidance. You can define free cash flows as operating cash flows minus capital expenditure (or capex). It’s a key metric that investors in metal and mining companies should track.
Previously in this series, we looked at copper miners’ first-quarter production and 2018 guidance. When commodity prices fall, high-cost producers become unprofitable much sooner than their peers, which are placed more favorably on the cost curve. It’s, therefore, crucial for commodity producers to have competitive cost structures.
Previously in this series, we’ve looked at major copper producers’ first-quarter production data. In this article, we’ll look at the 2018 production guidance provided by leading copper miners. We’ll be focusing on companies that changed their guidance this year.
By looking at leading copper miners’ production profiles, we can get crucial insights into the global copper supply. Freeport-McMoRan (FCX) shipped 450,000 metric tons of copper in the first quarter, compared to 461,000 metric tons in the sequential quarter. While Freeport’s first-quarter copper production fell slightly on a sequential basis, it rose 22.7% year-over-year (or YoY).
Freeport-McMoRan (FCX) released its first-quarter earnings on April 24 and saw a selling spree after its earnings miss and management’s commentary on Indonesia operations rattled investors. See 5 Reasons Freeport-McMoRan Fell after Its 1Q18 Release to see what spooked markets in the company’s earnings report. Copper has seen weakness this year.
Vales (VALE) stock has seen a significant shift in ratings over the last few months. Most of the recent analyst ratings, however, point to negative sentiment among analysts. This sentiment contrasts sharply to eight analyst upgrades for the stock in 2017. Analysts were positive about the company’s deleveraging policy, which has now been mostly priced into the stock.
A state audit of operations at Indonesia's Grasberg mine has cast a cloud over the government's multi-billion-dollar deal to take a majority stake in the mine from Freeport McMoRan Inc (FCX.N) and its partner Rio Tinto (RIO.AX), according to government and company officials. In April, in follow-up action to the audit, the environment minister issued two decrees that gave Freeport six months to overhaul management of its mine waste, or tailings, at Grasberg, the world's second-biggest copper mine.
Is a Valuation Rerating in the Cards for Vale Stock? Vale’s (VALE) base metal (DBB) production, including nickel and copper production, was in line with its decision to lower its footprint by putting non-competitive mines on care and maintenance. Vale’s strategy is to preserve its optionality in nickel in case of higher demand for nickel class I. Nickel production, therefore, reached 58,600 tons in the first quarter, a decline of 18% year-over-year and 25 sequentially.
Freeport-McMoRan (FCX) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
Freeport-McMoRan Is Up ~13% in May: Can Hot Streak Continue? According to Reuters, citing a statement from Rio Tinto (RIO) (TRQ), the miner is in talks with Indonesia’s Inalum to sell its stake in Grasberg for $3.5 billion.* Grasberg is the second-largest copper mine after Escondida, which is operated by BHP Billiton (BHP). According to the statement, “No agreement has been reached and there is no certainty that a binding agreement with Indonesia’s state mining holding company Inalum will be signed.” Freeport-McMoRan (FCX) is also separately negotiating a stake sale with the Indonesian government (EIDO).