The recent surge in copper prices has caught the attention of investors looking to capitalize on this trend. The futures contract for May delivery of copper reached its highest level since January 2023, hitting $4.2565 last Thursday. This sharp rally in copper prices has sparked interest among market analysts and investors alike.
According to Strategas, there are several stocks worth considering for investors looking to take advantage of the rising copper prices. Chris Verrone, head of the firm’s technical strategy and macro research team, identified stocks with exposure to copper that are breaking out of their multi-year ranges. Among the U.S.-listed tickers with the highest correlation to copper in the last decade are Freeport-McMoRan and Southern Copper.
Freeport-McMoRan, a copper mining company, has seen a 16% rally in its stock price so far this year. However, analysts are divided on the stock, with just over half of them rating it as a buy. The average price target suggests a slight downside from current levels. Despite this, Bernstein analyst Bob Brackett upgraded the stock to an outperform rating, citing a potential catalyst in 2024 related to Indonesia extending a special mining license for Freeport-McMoran’s Grasberg mine.
Southern Copper has seen an even more significant increase in its stock price, soaring 28% since the beginning of the year. Despite this strong performance, half of the analysts covering the stock have a negative view, rating it as underperform. The average price target implies a downside from current levels. However, Jefferies analyst Alejandro Anibal Demichelis recently upgraded the stock to a buy rating, pointing to an improving copper price outlook as a potential catalyst for further gains.
As copper prices continue to rise, investors have the opportunity to capitalize on this trend by investing in companies with exposure to the metal. Stocks like Freeport-McMoRan and Southern Copper have shown strong performance in response to the surge in copper prices. While there may be some mixed views among analysts, the potential for further gains remains for those willing to take on the risk associated with this volatile market.