Canaccord Adams Maintains a 'Sell on Freeport McMoRan (FCX), Price Target Lowered
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Canaccord Adams maintains a 'Sell' rating on Freeport McMoRan (NYSE: FCX). Price target lowered to $15.50.
Canaccord analyst says, "Balance sheet stress at our current commodity price forecasts can be mitigated by suspending the dividend, closing or curtailing uneconomic production, deferring capital spend, and cutting costs to bare bones. Continued copper price deterioration could begin to stress debt covenants...We believe we are probably close, but not close enough, to bottom-of-cycle equity pricing for Freeport. However, we would need to see production cuts soon to confirm our belief that annual average copper and molybdenum prices at bottom-of-cycle could be better than US$1.25/lb and US$7/lb...Unless copper and molybdenum prices start to recover, we expect Freeport to suspend its dividend some time soon, and to announce copper production cuts in December."
Freeport-McMoran Copper & Gold Inc., through its wholly owned subsidiary, Phelps Dodge, and its majority-owned subsidiary, PT Freeport Indonesia, is a copper, gold and molybdenum mining company.
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