Shares of Freeport-McMoRan (FCX.US) are down nearly 4% in Tuesday trading, as a downgrade from Morgan Stanley weighs on investor sentiment despite an otherwise bullish backdrop for copper and gold prices. The move comes amid growing concerns that the stock's recent rally may have already priced in much of the near-term optimism — leaving limited upside in the view of some market strategists. Morgan Stanley expects that 50% US tariffs on copper will hit demand side, pressuring the Freeport's business.
Morgan Stanley downgrades Freeport-McMoran to "Equalweight"
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The investment bank lowered its rating on Freeport from Overweight to Equalweight, citing a more balanced risk-reward setup. Despite raising its price target to $54 (from $45), Morgan Stanley believes the recent surge in share price — now hovering near $46 — leaves limited room for further near-term gains.
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Analysts pointed out that while the long-term fundamentals remain attractive, few immediate growth triggers are on the horizon. This tempers enthusiasm following a 20.8% year-to-date return, as per InvestingPro data.
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Freeport is currently trading at 5.1x 2026 EBITDA and 12.3x 2026 EPS estimates, which remains below its 5-year average multiples, but the rally has brought the stock closer to the fair value.
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While Freeport is expected to benefit from anticipated U.S. tariffs on copper imports, which could raise domestic COMEX copper prices, some analysts are turning more cautious. Notably, Citi maintained a Neutral rating, while Morgan Stanley also emphasized limited upside potential in the near term.
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Several brokerages, including Raymond James, highlighted Freeport’s exposure to regulatory and jurisdictional risk in Indonesia, which remains a strategic consideration for global investors watching the company’s long-term asset base.
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While firms like Stifel ($56 target) and CFRA ($57 target) have reinforced their bullish views, today’s downgrade has created a more divided analyst consensus, influencing short-term market psychology.
Today’s decline in Freeport shares appears less about fundamentals and more about positioning and expectations. After a strong run-up this year, the market is adjusting to the idea that further upside may not come easily without fresh catalysts.
Source: xStation5
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