Freeport-McMoRan initiated with a Neutral at JPMorgan

JPMorgan initiated coverage of Freeport-McMoRan with a Neutral rating and $42 price target. The analyst launched coverage of the North American copper sector with a cautious near-term outlook on “muted demand and market surpluses.” The tug of war between the macro environment in China, incremental policy easing, and multiple large projects ramping underpins the firm’s view that copper prices likely remain range-bound over the next few quarters, the analyst tells investors in a research note. However, JPMorgan is constructive on long-term fundamentals, saying secular demand growth from the energy transition can quickly outpace supply growth. Teck is its preferred copper play given its extensive pipeline of copper projects and likely exit from its carbon-intensive coal business.