The copper mining sector is at a pivotal point as electrification-driven demand collides with significant supply constraints and geopolitical unrest, including disruptions in the Strait of Hormuz and production setbacks at major mines. Investor sentiment is mixed, teetering between optimism for potential growth and concerns over inflation and interest rate pressures, leading companies like Barrick and Freeport-McMoRan to rethink strategies amidst declining stock prices. As firms prepare to capitalize on government support for energy investments, a strategic shift to phased investments in broad copper ETFs is advised only following market stabilization.
“Newmont is graded B on this front, indicating that it is trading at a discount to its peers.”
“Barrick Mining's narrative projects $19.4 billion revenue and $5.0 billion earnings by 2028. This requires 11.9% yearly revenue growth and a $2.2 billion earnings increase from $2.8 billion today.”
“Shares of Barrick Mining(NYSE: B) have been hit even harder, dropping more than 22% this month and more than 14% so far this year. The primary reason is the concern that inflation is rising along with the costs of oil and this could lead the U.S. Treasury to raise interest rates in an effort to curb that inflation.”
“Barrick is in the midst of a $42 million spinoff of its North American and Caribbean gold assets into a new company. The move should allow the parent company to focus on high-growth copper and gold projects such as Lumwana in Zambia and Reko Diq in Pakistan.”
“Our Discounted Cash Flow (DCF) analysis suggests Barrick Mining is undervalued by 31.9%. Track this in your watchlist or portfolio, or discover 55 more high quality undervalued stocks.”
“Barrick Mining currently trades on a P/E of 12.64x. That sits below the Metals and Mining industry average P/E of 20.04x and below the peer average of 23.15x.”
“Fair value in this bullish Narrative: US$40.91 per share. Current price vs this fair value: about 7.9% below the Narrative fair value.”
“Fair value in this cautious Narrative: US$20.44 per share. Current price vs this fair value: about 84.3% above the Narrative fair value.”
“analysts polled by S&P Global Market Intelligence seem to think Coeur is approaching the top of its earnings cycle.”
“Mining stocks are falling today, with gold prices down more than -2% and silver prices down more than -4%. Coeur Mining (CDE), Southern Copper (SCCO), and Hecla Mining (HL) are down more than -4%, and Freeport McMoRan (FCX) is down more than -2%.”
“Freeport-McMoRan is expected to post earnings of $0.49 per share for the current quarter, representing a year-over-year change of +104.2%.”
“Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Freeport-McMoRan is rated Zacks Rank #3 (Hold).”
