Freeport-McMoRan (FCX), a leading copper miner, closed Wednesday’s trading session 1.26% lower at $47.92 as the market continued to analyze its Q3 2024 earnings report. While the company surpassed revenue estimates, coming in at $6.79 billion compared to the expected $6.44 billion, it fell slightly short on earnings per share, reporting $0.36 instead of the anticipated $0.37.
Despite the mixed earnings results, the response from institutions has been varied. Raymond James upgraded its price target to $57 from $55 while maintaining an Outperform rating, expressing optimism about the company’s future performance. Their analyst, Brian MacArthur, cited strong sales figures, including 1 billion lbs of copper and 550 Koz of gold in Q3, and highlighted management’s projections for 4.1 billion lbs of copper and 1.8 Moz of gold production in 2024. MacArthur also pointed to a projected cash cost of $1.58 per lb of copper.
RBC Capital Markets, however, maintained a Sector Perform rating with a price target of $58. While acknowledging the strong free cash flow (FCF) driven by higher copper and gold prices, RBC highlighted potential near-term risks related to Freeport’s Indonesian smelter, which suffered a fire in October. This incident could delay production ramp-up into 2025 and necessitate an extension of Freeport’s concentrate export permit, set to expire at the end of the year. Despite these concerns, RBC projects a price target of $58, with a potential upside scenario reaching $80.
Scotiabank echoed a neutral reaction to Freeport-McMoRan’s Q3 2024 earnings, recognizing the company’s strong performance but maintaining a “Sector Perform” rating. They cited a “relatively balanced risk-reward” profile and slightly reduced their 12-month price target from $52 to $52. Analyst Orest Wowkodaw noted the unchanged multi-year production guidance and copper cash cost guidance in line with prior expectations.
While Freeport-McMoRan’s Q3 2024 earnings showcased strong performance, concerns surrounding the Indonesian smelter fire and its potential impact on production cast a shadow over the company’s immediate future. The market’s mixed reaction reflects a cautious optimism, with investors closely watching the company’s progress in addressing these challenges.