Tuesday, June 8, 2010

HSBC (NYSE:HBC) Upgrades Freeport-Mcmoran (NYSE:FCX)

HSBC (NYSE:HBC) upgraded Freeport-Mcmoran (NYSE:FCX) today from "Neutral" to "Overweight" while cutting their price target on the company from $85 to $80.

The mixed signals are from the uncertainties of the copper market which is highly dependent on demand from China, which is expected to drop as they attack the inflation in connection to their property market, which is a large user of copper.

Over the last 30 days or so, Freeport-Mcmoran has plunged in price by 22 percent, and 15 percent just over the last several days.

With Freeport trading at a forward price-to-earnings ratios of 7.25, it could be reaching a bottom and could be a time to buy, as some analysts believe the selloff in copper stocks has been overdone.

Even so, there is some caution to retain even at these levels, as some of the major Chinese cities experienced drops in property sales as high as 70 percent over the last month, and that has to cut deeply into copper demand.

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