Al Root

Copper prices have been on a stellar run, boosted by President Donald Trump's proposed tariffs. But Wall Street sees headwinds for the metal, with two miners catching downgrades.

Shares of Freeport-McMoRan and Southern Copper fell early Tuesday after Morgan Stanley analyst Carlos De Alba cut his ratings for the stocks.

He bumped Freeport to Hold from Buy and took his price target up to $54 a share from $45.

The miner's stock down 0.6% in premarket trading at $45.34, while S&P 500 and Dow Jones Industrial Average futures were up 0.4% and flat, respectively.

A downgrade with a price target increase shows what shares have been doing. Coming into Tuesday trading, Freeport stock was up about 36% over the past three months, boosted by President Donald Trump's proposed 50% tariff on imported copper, set to take effect in August, which sent benchmark copper prices to about $5.60 a pound from $4.80 a pound.

The U.S. produced about 890,000 metric tons of refined copper in 2024, according to the USGS, roughly half of the country's consumption.

He also cut shares of Southern Copper to Sell from Hold. His price target went to $99 a share from $86.

Southern Copper shares were down 1.4% at $98.62 in premarket trading.

In both cases, De Alba cited concerns about macroeconomic growth and valuation. In April, Southern Copper shares traded for about 17 times estimated 2026 earnings, according to FactSet. Now, they trade for about 22 times. Freeport's price-to-earnings ratio went to 19 from 13 over the same span.

As for demand, Citi analyst Tom Mulqueen noted in a Tuesday report that tariffs and policy changes will be a headwind in the second half of 2025.

"We also see sustained sluggish manufacturing activity and solar frontloading weighing on copper end-use consumption in the months ahead, " wrote Mulqueen. Frontloading refers to demand being pulled ahead as solar manufacturers tried to get ahead of renewable policy changes in the U.S. and elsewhere.

He sees copper prices falling to about $4 per pound in the coming three months.

Overall, 65% of analysts covering Freeport rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Freeport stock is about $51 a share.

Only about 16% of analysts covering Southern Copper rate shares Buy. The average analyst price target is about $93 a share.

Write to Al Root at allen.root@dowjones.com

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July 15, 2025 07:56 ET (11:56 GMT)

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