Analysts at Deutsche Bank on Tuesday offered some tepid
commentary for mining giants Freeport-McMoRan Copper & Gold
Inc. (
FCX
) and Cliffs Natural Resources Inc. (
CLF
).
The firm maintained its "Buy" rating on CLF but slashed its
price target from $105 to $80. That new target still suggests a 70%
upside to the stock's Monday closing price of $47.11.
Meanwhile, the analyst also kept its "Buy" rating on FCX but
lowered its target from $52 to $45. That new target suggests a 30%
upside to the stock's Monday closing price of $34.53.
A Deutsche Bank analyst commented, "Most Metals & Mining
(M&M) equities posted negative returns in 2Q12, in sync with
declining commodity prices on fears of escalation of European
sovereign risk and deterioration in 'real' economic activity in
US/China. Capex overruns, cost inflation and rising country risk
(ex-US/Canada) with governments stepping in to garner a larger
share of the mining profits have altogether led to further sector
de-rating. While some more pain in 3Q12 is possible, we feel that
much of the pessimism is already priced in by the market. We
anticipate some level of government intervention to stimulate
waning growth, benefiting commodity prices and in-turn producers by
4Q12."
The Bottom Line
Shares of Freeport McMoran (
FCX
) have a 3.62% dividend yield, based on last night's closing stock
price of $34.53. The stock has technical support in the $30 price
area. If the shares can firm up, we see overhead resistance around
the $38-$40 price levels. Shares of Cliffs Natural Resources (
CLF
) have a 5.31% dividend yield, based on last night's closing stock
price of $47.11. The stock has technical support in the $40 price
area. If the shares can firm up, we see overhead resistance around
the $52-$56 price levels.
Freeport-McMoRan Copper & Gold Inc. (
FCX
) and Cliffs Natural Resources Inc. (
CLF
) are both currently rated "Neutral" by Dividend.com.
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