There’s a lot to be optimistic about in the Materials sector as 2 analysts just weighed in on Freeport-McMoRan (NYSE:FCX) and Archrock (NYSE:AROC) with bullish sentiments.
Freeport-McMoRan (FCX)
B.Riley FBR analyst Lucas Pipes maintained a Buy rating on Freeport-McMoRan yesterday and set a price target of $20. The company’s shares opened today at $17.03.
Pipes wrote:
“This morning, 7/12, Freeport announced the terms of the divestment of its 9.36% interest in PT- FI as part of a comprehensive solution to the multi-year stand-off between the company and the government of Indonesia. We believe the terms disclosed this morning confirm our positive view on the resolution that triggered our upgrade of Freeport in late May [ Valuation Marker]. Importantly, Freeport states in its press release that its share of future cash flows is comparable to the cash flows under existing arrangements, while Freeport will also continue to manage the operations of PT-FI. We believe the preservation of cash flows is precisely what Freeport has been working towards and to the extent this conclusion holds, it marks a major accomplishment for the company and management team.”
According to TipRanks.com, Pipes is a 4-star analyst with an average return of 7.0% and a 60.5% success rate. Pipes covers the Basic Materials sector, focusing on stocks such as Peabody Energy Corporation Comm, Novagold Resources Inc New, and CONSOL Coal Resources LP.
Freeport-McMoRan has an analyst consensus of Moderate Buy, with a price target consensus of $17.96.
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Archrock (AROC)
B.Riley FBR analyst Tom Curran reiterated a Buy rating on Archrock today and set a price target of $15. The company’s shares opened today at $12.55, close to its 52-week high of $13.35.
Curran said:
“Archrock (AROC) has concluded its hunt for a permanent CFO with an outside hire, appointing Doug Aron as and CFO effective 8/13/18. We believe this is merely the first of up to four positive catalysts for the stock this summer. Of the remaining three, we’re very confident about two: (1) the announcement of a 10% increase in the regular quarterly dividend the week of 7/23-7/27, and (2) the delivery of a bullish 2Q18 earnings event, which should result in an upward revision of consensus 2019 EBITDA. As for the potential third, our recent research and checks suggest that the contract compression market could soon see another M&A transaction between two other players, which would mark the third such deal since June 2017 (following Enerflex/Mesa Compression and USA Compression/CDM). We reiterate our Buy rating and $15 price target on this Alpha Generator pick.”
According to TipRanks.com, Curran has 0 stars on 0-5 star ranking scale with an average return of -2.9% and a 49.3% success rate. Curran covers the Basic Materials sector, focusing on stocks such as Select Energy Services Inc, Eco-Stim Energy Solutions, and Schlumberger Limited.
Archrock has an analyst consensus of Moderate Buy, with a price target consensus of $14.
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