Goldman Sachs Upgrades Freeport-McMoRan on Copper Fundamentals
Copper has also seen a huge rise and is now attempting to breakout and test the recovery highs around $3.60/lb. So again GS seems to have turned bullish long after a run has begun. Now to be fair, the copper inventory situation has become a lot more bullish over the last couple of months. LME copper inventories continue to plunge on a daily basis from 520k tonnes 6 months ago to 382K tonnes today.
- Goldman Sachs was active in the metals segment on Monday morning. The firm upgraded Freeport-McMoRan (NYSE: FCX - News) to "Buy" from "Neutral" and lifted its price target to $94 from $79, citing a bullish outlook for the copper space. Meanwhile, gold, which accounted for about 17% of the firm's 2009 revenues, is trading at record highs. Goldman's price target represents a 15% premium to the stock's price at the end of last week.
- Freeport-McMoRan gained 14.5% in the month ended Friday, ranking it first among Copper Stocks Index components, where aggregate performance has been in-line with the S&P 500 for the period. Other top performers include Southern Copper (NYSE: SCCO - News) and Sterlite Industries (NYSE: SLT - News), and it will be interesting to see how the sector responds to Goldman's copper commentary this week.
Disclosure: Long FCX