Mining Stock Pops on Upgrade, Surging Copper Prices

UBS upgraded FCX to “buy” from “neutral”

Freeport-McMoRan Inc (NYSE:FCX) stock is up 1.2% to trade at $39.33 at last glance, after the gold and copper miner received an upgrade from UBS to “buy” from “neutral.” The analyst in question also raised the equity’s price-target hike to $48 from $42.50 — a 23.5% premium to yesterday’s close. What’s more, the mining sector is benefitting from surging copper prices today, which earlier hit a 16-month high. 

The brokerage bunch leaned bullish toward FCX coming into today, with 12 of the 19 firms in question sporting a “buy” or better rating. Plus, the 12-month consensus target price of $46.75 is already an 18.4% premium to current levels. 

Shares are pacing for their best weekly gain since April, and have added 35.6% in the last three months. The security still carries a 20.6% year-to-date deficit, though, as it bounces bounce off a bear gap to its lowest level in six months.

Bulls have been moving in over the last two weeks, per the equity’s 10-day call/put volume ratio of 5.65 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that ranks in the 84th percentile of readings from the past 12 months.

Freeport-McMoRan stock is also seeing attractively priced premiums, per its Schaeffer’s Volatility Index (SVI) of 41% that sits in the low 13th percentile of its annual range. In other words, options traders are pricing in low volatility expectations.