Bulls Circle Freeport-McMoRan Stock After Earnings

Calls are running double the intraday average

Digital Content Manager
Oct 20, 2022 at 11:02 AM
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Copper mining name Freeport-McMoRan Inc (NYSE:FCX) is one of today's earnings success stories. The firm reported profits of 26 cents per share for its third quarter on $5 billion in revenue, topping analysts' expectations on both counts. While the company's profits did mark a steep quarterly drop, thanks to recession worries and China's Covid-19 lockdowns. These constraints have weakened the cost of copper prices, which dropped 16.7% in the first quarter. However, investors are brushing off some of these concerns today to focus on FCX's earnings beat, with the stock last seen up 5.9% at $30.06. 

Freeport-McMoRan stock's options pits are also optimistic. So far, 14,000 calls have exchanged hands, which is double the intraday amount, compared to 6,083 puts. The most popular position is the October 32 call, followed distantly by the 30 call in the same series. 

A broader look shows more tepid sentiment. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock sports a 10-day put/call volume ratio that stands higher than 86% of readings from the last 12 months. In other words, puts are much more popular than usual among these traders. 

Analysts have taken a lukewarm stance as well. Of the 15 in coverage, eight say "hold" or worse, compared to seven "buy" or better ratings. Meanwhile, the 12-month consensus price target of $36.78 is a 20.8% premium to current levels. 

FCX is set to close above resistance at the 90-day moving average for the first time since plummeting below here in mid-April. The stock will still need to topple a recent ceiling at the $31 mark if it wants to chip into its 28% year-to-date deficit, however, as the level rejected its most recent rally attempt earlier this month. 

 

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