Freeport McMoRan (FCX +0.3%) edges higher even after Credit Suisse downgraded shares to Underperform from Neutral with a $10 price target, cut from $11, citing valuation and the firm's copper surplus outlook.
FCX "lacks valuation support" given mid-cycle EBITDA and the copper production reset "sharply lower" in 2023, Credit Suisse analyst Curt Woodworth says, adding copper has much less cost support than aluminum in a downturn and faces "sharply higher" supply-side risks in 2021-23.
The U.S.-China Phase 1 trade deal likely will have minimal implications on metals demand, Woodworth also says.
FCX surged 5% yesterday as copper prices are forecast to climb in 2020.
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