Deutsche Bank analysts weigh in on energy and mining firm Freeport-McMoRan Inc (NYSE:FCX) and online retail giant Amazon.com, Inc. (NASDAQ:AMZN). While one analyst offers commentary on Freeport-McMoRan following recent downgrade by Moody’s, the other shines light on Amazon’s recent earnings results.
Deutsche Bank analyst Jorge Beristain reiterated a Hold rating on shares of Freeport-McMoRan, with a price target of $11, after the credit ratings provider Moody’s downgraded Freeport-McMoRan’s credit rating four levels to junk to reflect “a fundamental shift in the operating environment” as copper prices plummet.
Beristain noted, “Moody’s negative outlook reflects uncertainty on ability to execute asset sales (FCX targeti ng $5-10bn) within reasonable timeline in order to reduce Debt. Need to sell assets imminent as access to undrawn $4bn credit facility would cease should leverage exceed 5.9x by 1H16 pushing for debt renegotiation as a result (with $224m in YE15 cash other source of liqui dity), more so post-failure today to reach 6-month export permit in Indonesia (~$7.5m/day in EBITDA). Every 25bps increase on FCX’s term loan ($3bn) and revolver credit facility ($500m), equates to ~$8.75m/year of additional interest costs. While downgrade was expected, the 4- notch cut and negative outlook was worse-than-expected, raising concerns on other 12 DB M&M coverage on Moody’s review list.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Jorge Beristain has a yearly average return of -12.8% and a 29.2% success rate. Beristain has a -15.5% average return when recommending FCX, and is ranked #3516 out of 3594 analysts.
Out of the 9 analysts polled by TipRanks, 3 rate Freeport-McMoRan a Buy, 5 rate the stock a Hold and 1 recommends a Sell. With a return potential of 128%, the stock’s consensus target price stands at $10.57.
Deutsche Bank analyst Ross Sandler reiterated a Buy rating on shares of Amazon, with a price target of $800, after the company reported fourth-quarter results, which were in line with estimates for revenue and EPS, but missed Street expectations.
Sandler commented, “The pullback in AMZN shares should create a nice buying opportunity once the dust settles, we think sub 18x 2016 EBITDA or around $530 per share is a decent entry point (vs. 5 year trough is 16x). All we see happening here is a consensus reset of the misperception that retail CSOI margins would go up structurally vs. our view that the company is constantly in heavy investment mode with temporary pauses. 2015 was the pause, 2016 is the resumption of investing for global growth, which entails margins flattening out. We see no change to our longterm bullish thesis. We have slightly increased our estimates, primarily a result strong growth and margin at AWS.”
According to TipRanks.com, analyst Ross Sandler has a yearly average return of 5.0% and a 55.7% success rate. Sandler has a 38.8% average return when recommending AMZN, and is ranked #372 out of 3594 analysts.
Out of the 32 analysts polled by TipRanks in the last 3 months, 29 rate Amazon stock a Buy, while 3 rate the stock a Hold. With a return potential of 20%, the stock’s consensus target price stands at $762.93