Key insights
- Morgan Stanley downgraded Freeport-McMoRan (FCX) due to slower production ramp-up at its Indonesian mine, lowering the price target. While long-term copper demand fundamentals remain, near-term earnings are projected lower. This could have a minor negative impact on the materials sector, but the effect is limited due to the company-specific nature of the downgrade.
Investing.com -- Morgan Stanley has downgraded Freeport-McMoRan Inc to “Equal-weight” from “Overweight,” citing a slower-than-expected production ramp-up at its key Grasberg Block Cave mine in Indonesia and limited near-term upside for the stock.
The brokerage also reduced its price target to $66 from $70, reflecting a more balanced risk-reward outlook after the stock recently reached prior target levels. Analysts noted that while the company’s long-term prospects remain intact, delays in scaling production and temporarily higher operating costs are likely to weigh on performance in the near term.
Morgan Stanley revised its financial forecasts downward, projecting 2026 EBITDA of $11.4 billion and 2027 EBITDA of $14.7 billion—both below previous estimates and market consensus. Earnings per share are now expected to come in at $2.94 for 2026 and $4.15 for 2027.
The note highlighted that the delayed ramp-up in Indonesia reduces the company’s ability to fully capitalize on elevated copper and gold prices, limiting its potential to outperform peers. However, analysts pointed to possible upside risks, including faster production growth, lower costs, stronger commodity prices, and potential U.S. tariffs on refined copper imports.
Despite the downgrade, Morgan Stanley maintained that Freeport’s long-term fundamentals—particularly driven by copper demand linked to electric vehicles and global electrification trends—remain supportive.