43.66 -0.11 (-0.25%)
After hours: 4:27PM EST
|Bid||43.07 x 1100|
|Ask||44.48 x 1000|
|Day's Range||43.36 - 43.90|
|52 Week Range||40.57 - 51.87|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||11.80|
|Forward Dividend & Yield||3.12 (7.09%)|
|Ex-Dividend Date||Sep 04, 2019|
|1y Target Est||41.34|
Copper prices will rebound in the coming months from a downturn in demand caused by the coronavirus outbreak in China, Chilean mining minister Baldo Prokurica said on Tuesday. China reported its fewest new coronavirus infections since January on Tuesday and its lowest daily death toll for a week, but the World Health Organization said data suggesting the epidemic had slowed should still be viewed with caution. China is the world's top copper consumer, and Chile is the red metal's top producer.
of BHP said he wanted to expand in the commodities that would be needed in the shift to a low-carbon economy and was prepared to sell its thermal coal assets at the right price. “We need more copper and we need more nickel,” Mr Henry told reporters.
(Bloomberg) -- BHP Group’s new top executive has a plan to prosper in a world that’s accelerating efforts to cut greenhouse gas emissions -- double down on the raw materials that’ve been key through its near 170-year history.The world’s top miner, with roots in a 19th Century tin discovery, plans to add more copper and nickel to meet rising demand from renewable energy and electric vehicles, and sees a continuing role for key coal mines and oil wells, according to Chief Executive Officer Mike Henry, who signaled his tenure won’t begin with any radical overhaul.“We already produce some of the products that will be essential as the world transitions to a lower carbon economy and which will continue to prosper in a decarbonized world,” Henry, who took his post last month, told reporters Tuesday. “We do still need to create more options in future-facing commodities.”Alongside copper and nickel, potash is regarded by BHP as another key future material and the producer is on track to seek board approval next year to spend as much as $5.7 billion on the first stage of its Jansen mine project in Canada, Henry said.Demand in the battery sector alone for nickel will rise 16-fold and for copper by about 10-fold by 2030, according to BloombergNEF, while base metals are also key for wind turbines and solar power. Potash, a crop nutrient, is seen as poised for gains as nations seek to feed rising populations from a shrinking area of agricultural land.BHP also intends to accelerate efforts to curb its carbon emissions, Henry said in a Bloomberg TV interview, and will set out new targets later this year. “We’ll be doing more on that front,” including setting goals for tackling customers’ emissions, he said.Like rivals Glencore Plc and Rio Tinto Group -- both of which have touted the role of their existing commodities in meeting future demand trends -- BHP hopes to convince investors it can adapt to the world’s shifting raw materials needs without any sweeping changes to its portfolio, or any need for costly and risky deal-making.“My first preference is to be securing these options through exploration and early stage entry,” Henry said in the interview. “We’ll be looking to create the portfolio that fits the future.”BHP has also considered metals including cobalt and lithium, but sees the markets as currently lacking sufficient scale, Henry told analysts.Henry continues to see long-term value in oil and coking coal production, sectors that are increasingly under scrutiny from investors focused on climate concerns. Declining rates of global oil output and a demand outlook that’s seen peaking only in the mid-2030s mean BHP’s petroleum unit remains attractive, while the producer sees no current substitute to replace metallurgical coal in the steel-making process.BHP remains open to exiting from thermal coal assets in Australia and Colombia, Henry said, though is seen by analysts as facing a tough task to extract sufficient value from a shrinking pool of buyers.Despite the focus on potential future sources of demand growth, iron ore continues to be the engine of current profits, accounting for about 47% of revenue in final six months of 2019, up from about 36% in the same period a year earlier.\--With assistance from Haidi Lun and Shery Ahn.To contact the reporter on this story: David Stringer in Melbourne at email@example.comTo contact the editors responsible for this story: Alexander Kwiatkowski at firstname.lastname@example.org, Keith Gosman, Phoebe SedgmanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- BHP Group warned raw materials demand and prices will take a hit on lower growth in China if the fallout from the coronavirus outbreak extends beyond the end of next month.The world’s biggest miner flagged China’s construction and manufacturing sectors need to return to regular operations in April to ensure that existing disruption can be made up for before the end of year.If the impact of the outbreak can’t be contained this quarter, annual growth forecasts will need to be revised down, Huw McKay, BHP’s vice president of market analysis and economics, said Tuesday in a blog post. “This would then flow directly through to lower commodity demand and price expectations.”BHP forecasts China’s growth to slow to about 6% this year and as low as 5.75% in 2021 based on a swift recovery from the virus outbreak. In a worst-case scenario that combined a lingering impact from the virus and a re-escalation of trade war tensions, the nation’s economic expansion this year could slip to 5.5%, the miner said.Goldman Sachs Group Inc. and Macquarie Group Ltd. are among banks who’ve cut China growth forecasts for both the first quarter and the full year as a result of the outbreak. China’s gross domestic product will grow 4% in the first quarter, according to the median of 18 forecasts since Jan. 31, which would be the lowest level since 1990.While BHP’s new Chief Executive Officer Mike Henry told reporters the producer hasn’t experienced any major impact to demand from China so far, caution over the virus outlook led the company to take a more conservative approach on its first-half dividend payment. Potential negative impacts for commodities markets have “barely been priced in,” according to Citigroup Inc.A decision to pay out a lower proportion of earnings compared to a year earlier reflected “caution due to near term market volatility driven by the 2019 coronavirus disease outbreak, trade policy and geopolitics,” BHP said in a separate statement, as it posted first-half earnings that jumped 29%.The miner said it expects annual crude oil demand to decline by about 200,000 barrels a day as a result of disruption so far, a figure that may rise further.If virus impacts are contained by the end of March, consumers of materials such as steel and copper should fully recover from the second quarter -- and potentially operate at higher than usual rates -- meaning that overall materials demand in 2020 will be unaffected, according to BHP’s McKay.About 90% of China’s steel production, more than 80% of auto production and floor space under construction and 80% of infrastructure investments are located in provinces with announced restart dates before the end of February, he said.To contact the reporter on this story: David Stringer in Melbourne at email@example.comTo contact the editors responsible for this story: Alexander Kwiatkowski at firstname.lastname@example.org, Keith Gosman, Phoebe SedgmanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- BHP Group’s first-half earnings surged 29% on higher iron ore prices, allowing the company’s new top executive to extend a run of bumper returns to investors, even as the impact of the coronavirus outbreak stokes short-term uncertainty.The world’s top miner boosted its interim dividend payment 18%, though acknowledged that move reflected “caution due to near term market volatility driven by the 2019 coronavirus disease outbreak, trade policy and geopolitics.” BHP said Tuesday it will revise down expectations for economic and commodity demand growth, if the virus isn’t “demonstrably well contained” this quarter.Key InsightsNew Chief Executive Officer Mike Henry, a company veteran promoted to the role last month, set out some tentative details of his plans for the company, saying he wants BHP to be “safer, lower cost, more reliable and more productive -- with our portfolio and capabilities fit for the future.”Investors will be looking for more specifics as Henry hosts teleconferences Tuesday, and holds meetings over the coming weeks.The first-half earnings show just how dependent BHP remains on iron ore as an engine of profits. Sales of the steelmaking ingredient accounted for about 47% of revenue in the first half, up from about 36% a year ago.Underlying earnings at BHP’s continuing operations jumped to $5.2 billion from $4.03 billion a year earlier, BHP said. That was in line with a $5.1 billion median estimate among five analyst forecasts compiled by Bloomberg.BHP is progressing work to set new goals for scope 3 carbon dioxide emissions -- those generated by customers using the company’s products -- and will outline new climate change plans later in 2020. Henry is facing more intense scrutiny over emissions and on preparations for longer-term shifts in demand for fossil fuels.The producer flagged petroleum output is now seen at the bottom of a forecast range of 110-116 MMboe as a result of Tropical Cyclone Damien off the coast of Western Australia. Iron ore and coal operations remain on track, it said.Market ReactionBHP’s Sydney-traded shares have advanced about 4% in the past year, lagging rivals including Rio Tinto Group and Fortescue Metals Group Ltd.Get MoreFor more details on the earnings data, click here.Read the statement here.To contact the reporter on this story: David Stringer in Melbourne at email@example.comTo contact the editors responsible for this story: Alexander Kwiatkowski at firstname.lastname@example.org, Keith Gosman, Rob VerdonckFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
British stocks edged higher on Monday, with companies sensitive to Chinese demand getting a boost from the country’s efforts to limit the economic fallout from the deadly coronavirus.
The coronavirus will continue to be felt throughout the week in company earings updates and economic data. China’s central bank is expected to cut rates, and China sales will feature in Walmart’s results. Berkshire Hathaway also reports this coming weekend.
On paper, there's an intriguing bull case for miner Freeport-McMoRan (NYSE:FCX). Freeport-McMoRan stock looks cheap. Copper prices have dipped of late, but have at least one important long-term tailwind. And Freeport has steadily improved its balance sheet in recent years, cutting net debt by over $12 billion between the end of 2015 and the end of 2019.Source: MICHAEL A JACKSON FILMS / Shutterstock.com But the key phrase is "on paper." In practice, there's a huge stumbling block to the bull case for FCX stock. Even if Freeport-McMoRan can drive higher free cash flow, as bulls and the company itself project, there's a long-running concern as to where that cash flow is going to go.The answer, according to a recent interview with Freeport-McMoRan's chief executive officer, is not to shareholders. Given the history not just of Freeport but the entire mining industry, that's a significant problem.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Case for Freeport-McMoRan StockFCX stock already has been a solid investment in the last few years. Shares bottomed in January 2016 below $4, as pressure on the company's since-divested oil and gas assets weighed on the stock. From that bottom, Freeport-McMoRan stock has more than tripled -- and there's a case for more upside ahead. * 20 Stocks to Buy From the Law of Accelerating Returns After all, production should increase nicely in the next two years. After its fourth-quarter report last month, Freeport guided for copper sales to reach 3.5 billion pounds in 2020, up from 3.3 billion in 2019. In 2021, however, the figure should spike to 4.3 billion, as the Grasberg mine in Indonesia, of which FCX owns 49%, returns to normalized output after a shift to underground mining.From there, copper prices need to cooperate, and that's always a risk. Copper prices are notoriously sensitive to the global economy; the commodity has been nicknamed "Dr. Copper" for its ability to provide a leading indicator of macroeconomic strength. A poorly-timed recession -- or even continued softness in key markets in Asia -- could pressure prices and thus Freeport's earnings and cash flow.But there's one potential long-term driver for copper demand: electric vehicles. EVs are "copper hogs," meaning growth from the likes of Tesla (NASDAQ:TSLA) can boost copper prices. and those prices drop almost straight to Freeport's bottom line. It's not as if shares are expensive even in the current moderate-price environment; should copper spike higher from here, Freeport stock likely does the same. Balance Sheet and Cash FlowFinally, Freeport's balance sheet is in much better shape. As noted, debt has come down dramatically in a matter of years. The company has over $5 billion in liquidity, and a higher stock price if it wants to make an acquisition. If Freeport doesn't make a deal, free cash flow should impress -- particularly if copper prices rise.Indeed, with its fourth-quarter presentation, Freeport-McMoRan modeled solid free cash flow in a higher-price environment. At $3 per pound, up from a current ~$2.60, operating cash flow in 2021-2022 would be in the range of $5 billion.Capital expenditures currently estimated at $2.4 billion for 2021 suggest free cash flow around $2.6 billion. Put even a 10x multiple on that figure and FCX gains over 50%; increase the multiple, and the upside could be even higher. Where Does the Cash Go?To be sure, that paper case does require some help from copper prices. Models for 2021-2022 at $2.75 a pound suggest free cash flow under $2 billion. A market capitalization currently near $19 billion thus likely doesn't see that much upside without pricing help. But investors in mining stocks are looking for leveraged returns on gains the underlying commodity -- and on paper FCX stock is set up to provide precisely those returns if copper gains.But that gets to the practical problem, and the interview CEO Richard Adkerson gave to Reuters at the end of last month. Adkerson noted the potential for higher cash flow and a higher stock price which would allow the company to make acquisitions."I'm looking forward to having a new experience in my career toward accessing alternatives and deciding which way we go…We don't have a clear directive now on what that direction could be, but we will be attractively situated and will have an opportunity to add value through investments," he told Reuters.Those investments could include not just acquisitions but the construction of new mines.In other words, the incremental free cash flow Freeport-McMoRan hopes to drive isn't going back to shareholders. It's going back into the business under Adkerson's direction. And that should worry, if not terrify, FCX shareholders. Adkerson's HistoryAdkerson was named CEO on Dec. 10, 2003. Under his watch, Freeport-McMoRan stock has declined by 42%.There isn't an external reason for the pressure. Copper prices, according to data from YCharts, have increased 174% over that span. Meanwhile, diversified miner BHP Group (NYSE:BHP), which has significant copper holdings, has seen its stock more than triple. Including dividends, BHP has posted a total return of more than 450%. For Freeport-McMoRan stock, total returns remain modestly negative.One big reason for the decline was the aforementioned move into oil and gas, spearheaded by Adkerson. Freeport-McMoRan spent $20 billion on two acquisitions in 2012 at the height of the oil boom. The moves were instantly criticized by Wall Street and by investors; Freeport stock dropped 16% in a single day on the announcement. Allegations of self-dealing soon followed.Less than four years later, Freeport managed to get less than $4 billion for its assets at the nadir of the oil bust. Over $16 billion in shareholder value was destroyed.An investor might believe -- or want to believe -- that Adkerson and the Freeport board have learned their lesson from the disastrous acquisitions. There's no evidence they have.The Freeport-McMoRan dividend was slashed in 2014; the board hasn't hiked the payout since despite a paltry 1.6% yield and the expected growth in free cash flow. Adkerson, at least per his interview, is looking to spend more shareholder money after the company spent the last four years recovering from its foray into oil and gas.There are thus two scenarios here. Copper prices fall or stay roughly flat, and Freeport-McMoRan stock likely does the same. Or copper prices rise, giving Adkerson free reign to go and spend billions of dollars more of shareholder funds. Neither sounds particularly attractive. The Mining ProblemTo be somewhat fair, this is not a Freeport-only problem. As I detailed back in 2018, gold miners like Barrick Gold (NYSE:GOLD) have done a disastrous job of fulfilling their mission of providing leverage to the gold price. Barrick, Kinross Gold (NYSE:KGC) and AngloGold Ashanti (NYSE:AU) all saw their shares fall by over 60% even in a rising-price environment.Recent performance for mining stocks has been better, but it's still not as good as it should be in theory. Even the gains in Freeport stock over the last few years are more a case of the stock rallying sharply from 2016 lows than any real improvement on the ground. FCX stock actually is down 20% over the past three years despite basically flat copper prices. The Bottom Line on Freeport-McMoRan StockWhat makes a stock like FCX particularly problematic is that the exchange-traded fund revolution has created far better alternatives. An investor who is bullish on copper can simply buy copper through an ETF. She can lever up that bet through the use of margin or a 2x or 3x ETF. Those trades have risk if copper prices decline of course; so does FCX.But if copper prices rise, that investor doesn't have to let Adkerson determine what to do with her gains. ETFs do have fees, but they're generally minimal; meanwhile, Adkerson's pay packages from 2016 to 2018 alone totaled over $50 million, according to Freeport's most recent proxy statement.If Freeport-McMoRan and Adkerson truly had learned their lesson and were looking to use potentially higher cash flow for increased shareholder returns, that would be one thing. Clearly, they're not. History, and the -42% returns under Adkerson's 16-year tenure, both suggest that it is a real problem for Freeport-McMoRan stock.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 20 Stocks to Buy From the Law of Accelerating Returns * 10 Strong Lottery Ticket Stocks That Could Soar in 2020 * 7 U.S. Stocks to Buy on Coronavirus Weakness The post The Interview That Should Terrify Owners of Freeport-McMoRan Stock appeared first on InvestorPlace.
(Bloomberg) -- BHP Group Ltd., the world’s top miner, is in talks with Chinese customers to delay shipments of copper concentrates as the nation extended plant shutdowns to combat the spread of the coronavirus, according to people familiar with the matter.Suppliers are considering giving buyers in China flexibility on deliveries to discourage them from declaring force majeure, offering them a way out of contractual obligations, said the people, asking not to be identified because the information isn’t public.On Monday, copper for three-month delivery slipped 0.3% to $5,647.50 at 3:42 p.m. on the London Metal Exchange, extending Friday’s slump.BHP’s move offers more evidence of the far-reaching impact of the deadly coronavirus on commodity trade. The company operates Escondida, the world’s biggest copper mine, located in Chile. Producers in the South American nation, the globe’s largest exporter of the metal, are already in talks with clients on the deferment of cargoes due to port shutdowns in China as the government fights the outbreak.“We are working closely with our copper customers as they return from Chinese new year,” a BHP spokesman said in an email. The company was unable to comment on commercial arrangements with individual customers.Copper prices had slid for a record 14 straight days in London amid mounting concerns the coronavirus will aggravate the slowdown in global economic growth, crimping demand for the metal used in cars, electronic gadgets and construction. Prices rebounded briefly last week but resumed their slide Friday as automakers extended their shutdowns.(Adds copper price in the third paragraph)\--With assistance from James Thornhill.To contact the reporters on this story: Yvonne Yue Li in New York at email@example.com;David Stringer in Melbourne at firstname.lastname@example.orgTo contact the editors responsible for this story: Luzi Ann Javier at email@example.com, Pratish NarayananFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Lots of companies talk a good game about cutting planet-heating greenhouse emissions but their disclosures and targets have tended to focus on the emissions over which they have direct control and which are easiest to measure. That’s fine in an industry such as cement, where the bulk of carbon pollution occurs during the production process. From an environmental perspective these direct, or “Scope 1,” emissions are the main problem caused by these particular companies.But the approach falls down in companies working in oil, mining, carmaking, finance, and even fashion, because oftentimes most of their carbon footprint is contained in the products they sell or help finance — not their own operations.An oil giant can boast all it likes about how it’s reduced gas flaring; if car drivers are still filling up with its gasoline, the planet will keep getting hotter. The same goes for an iron ore producer that touts how its mining trucks are incredibly fuel efficient but whose main product is the basis for steel production. Luxury goods suppliers may run the greenest workshops imaginable, but use fabrics and materials that are deeply damaging to the planet.In the past, so-called “Scope 3” emissions — the pollution contained in products sold to customers or in goods and services purchased from suppliers — either weren’t calculated or were seen as someone else’s problem. Thanks to pressure from institutional investors and activists, plus leadership from a few enlightened chief executives, corporate attitudes about this subject are evolving fast. “Scope 3 is the elephant in the room,” Mark van Baal of investor advocacy group Follow This told the Norwegian oil major Equinor ASA’s annual meeting last year.The new impetus is welcome because unless companies try to reduce the environmental damage of their products and purchasing decisions, efforts to limit catastrophic climate change will fail. At the World Economic Forum in Davos last week the bosses of some of the world’s biggest oil producers debated setting targets for Scope 3 emissions, which typically make up about 90% of their carbon footprint. BP Plc’s new boss Bernard Looney is poised to abandon his predecessor Bob Dudley’s opposition to targeting customer emissions, according to Reuters. Royal Dutch Shell Plc, Repsol SA and Total SA have already set Scope 3 targets.In mining, Rio Tinto Plc argued it had “very limited control” over customer emissions but later bowed to pressure by promising to work with its customer (and China’s top steel producer) Baowu Steel Group on lowering the steel sector’s emissions. BHP Group Ltd. and Vale SA have gone further by promising to set goals for Scope 3 emissions. In BHP’s cases these are almost 40 times greater than its direct pollution.The European Union’s new guidelines on climate reporting also recommend that large companies disclose customer and supplier emissions. Banks and insurers, whose direct emissions are typically pretty negligible, should focus on their counterparties’ emissions, the guidelines say. Unfortunately, this is not yet legally binding.Reluctance to target this stuff is hardly surprising because the numbers can be huge. Volkswagen AG acknowledged last year that its vehicles are responsible for about 2% of all the CO2 produced by humans.(3)Among the largest Scope 3 polluters are companies that the public probably don’t immediately think of as big climate sinners. It’s no surprise that Shell and Petrobras make the list, but I hadn’t thought about Cummins Inc., which sells truck engines and industrial power generators, Nexans SA, whose cables transport electricity and data, and Daikin Industries Ltd, which builds air-conditioning units.I’m not knocking these companies; at least they’re disclosing these emissions and some are setting targets to reduce them. Cummins plans to reduce absolute lifetime emissions from newly sold products by 25% by 2030, for example.Calculating the emissions from sold products is a pretty complicated exercise too. ThyssenKrupp AG’s massive Scope 3 emissions include those contained in the steel in the cars we drive around, the cement plants its factory construction unit helped build and the elevators in office buildings. Daikin has to consider the probable lifespan of its air conditioners, their energy consumption and what kind of electricity they’re powered by, plus probable leakage rates of planet-heating refrigerants.Fortunately there’s no shortage of organizations and methodologies to help compile these data. (Michael Bloomberg, founder of Bloomberg News and its parent Bloomberg LP, chairs the FSB Task Force on Climate-related Financial Disclosures).Regrettably, not all large manufacturers have seen the light through the smoke. The copious sustainability reports of some companies still don’t spell out the total emissions of the products they sell. Volvo AB told me there’s no globally harmonized standard on how to calculate and disclose Co2 from heavy duty trucks, but that it’s evaluating opportunities to report on this in future. Daimler AG, which wants a completely CO2 neutral truck fleet in key markets by 2039, plans to start disclosing Scope 3 emissions for trucks in its next sustainability report.(1) You know something’s up when it takes a hedge fund to tell a company to clean up its act. The shortcomings in aircraft maker Airbus SE’s Scope 3 emissions reporting were highlighted in a critical letter late last year from Chris Hohn’s TCI Fund Management, the world’s most profitable activist fund. Airbus and rival Boeing have committed to halving the aviation industry’s net emissions by 2050. It would help focus minds on that urgent task if they fully accounted for their own role in flight pollution.(2) If Shell can do it, why not them?(1) Like other truck manufacturers, VW doesn't report Scope 3 emissions for heavy trucks but made the estimate based on its market share andthe truck sector's contribution to global emissions (plus its carbon footprint from cars)(2) It already does so for cars.(3) Boeing's environment reportonly counts Scope 3 emissions from business travel. Airbus has urged the aviation sector to develop a common methodology for Scope 3 emissions to aid consistency in reporting.To contact the author of this story: Chris Bryant at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Zacks Analyst Blog Highlights: BHP Group, Osisko Gold Royalties, Pretium Resources, Royal Gold and Golden Star Resources
The market for this essential industrial material tanked in recent years but there are signs it's settling down, with fewer big players in the market.
Billiton (BBL) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank 1 (Strong Buy).
BlackRock has set out plans to rid its portfolio of coal companies. But for diversified miners that dig up an array of products, it’s not obvious which companies will be axed from the fund management giant’s active funds and which will stay.
Mining giant BHP Group said on Tuesday that poor air quality caused by smoke from Australia's bushfires is hurting coal production, as authorities cautioned a reprieve from hazardous fire conditions could end within days. The warning from the world's biggest miner underscores how an unusually long bushfire season that has scorched an area one-third the size of Germany is damaging the world's No. 14 economy. Australia's tourism and insurance industries have already foreshadowed they face a A$1 billion ($687 million) hit each from the fires.