Freeport McMoRan rated Underperform at BofA Merrill on weak copper outlook

|By:, SA News Editor

Freeport McMoRan (FCX -1.1%) is resumed with an Underperform rating and $8 price target at BofA Merrill Lynch, which says balance sheet improvements are now priced in, and a sluggish copper outlook and risks related to Indonesia operations poise a real risk.

BofA's global commodity team sees copper as the weakest in the base metals complex against a backdrop of sluggish global growth and large mines ramping up.

After asset sales, FCX’s Americas and Indonesia mines become even more critical, and Indonesia challenges return to the forefront, specifically affected by export restrictions that could start in 2017 and an unclear future once FCX’s license expires in 2021.

Deutsche Bank is more optimistic, retaining a Buy rating and $12.50 price target on valuation and expected corporate cost savings now that FCX has largely exited oil and gas following the $742M sale of its onshore California assets (

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