RBC Eyes Another 20% Surge for Freeport-McMoRan Stock

More bull notes could come down the pike for outperforming FCX stock

Mar 12, 2018 at 10:11 AM
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RBC raised its price target on shares of Freeport-McMoRan Inc (NYSE:FCX) to $22 from $18 -- representing expected upside of more than 19% to Friday's close at $18.43, and sitting in territory not seen since May 2015. While FCX stock has dropped 0.2% in early trading to hover near $18.39, the brokerage firm's upbeat outlook is likely in response to the equity's longer-term uptrend. Specifically, the security has surged roughly 66% since its early June lows, and hit a two-year high in late January after a positive earnings reaction.

Nevertheless, most analysts remain on the sideline when it comes to outperforming Freeport-McMoRan stock. Of the 15 brokerages covering the shares, 10 maintain a "hold" or "sell" rating. Should FCX resume its uptrend, the door is wide open for a round of upgrades to draw more buyers to the table.

Plenty of options traders have been betting on bigger gains for FCX shares, too. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's top-heavy 50-day call/put volume ratio of 3.86 ranks in the 87th annual percentile, suggesting calls have been bought to open over puts at a faster-than-usual clip.

And in addition to FCX stock's long-term technical strength and the chance for upgrades to lift the shares higher, the equity's calls are pricing in lower volatility expectations than their put counterparts at the moment -- a potential boon to premium buyers. At last check, Freeport-McMoRan's 30-day implied volatility skew of 13.6% was ranked in the 99th annual percentile.


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