The analyst called the copper sector's risk/reward "neutral to bullish"
Freeport-McMoRan Inc (NYSE:FCX) stock is marginally lower ahead of the opening bell -- last seen down 0.4% to trade at $42.02 -- even after Credit Suisse upgraded the copper concern to "neutral" from "underperform." The analyst also hiked its price target by $6 to $38, noting that the copper sector's risk/reward is now "neutral to bullish" and that copper prices should remain supported in the medium term.
There's room for even more upgrades at the moment, as six of the 10 in coverage consider FCX a "hold" or worse. What's more, the equity's current 12-month consensus price target of $49.82 is an 18.1% premium to last night's close, leaving ample space for a round of price-objective adjustments.
An unwinding of pessimsim among options players could put additional wind at the stock's back. The security's Schaeffer's put/call open interest ratio (SOIR) of 1.50 sits higher than 98% of readings from the past 12 months. This high ranking indicates these short-term options traders are incredibly put-biased at the moment.
On the charts, Freeport-McMoRan stock is recovering from a dip below long-time support at the 320-day moving average that lasted for the majority of May, though pressure from several short-term trendlines, including the 60-day moving average, remains. On a year-to-date basis, FCX stands just above breakeven.