MORGAN STANLEY SAYS COPPER STOCKS TO SURGE IN 2021Hey MaryK, looks like your broker at MS was right to get you into Candente Copper as Morgan is now saying Copper stocks are set to move on up!
MORGAN STANLEY SAYS COPPER STOCKS TO SURGE IN 2021
Copper-exposed stocks could be set to surge in 2021 and a buying opportunity may be around the corner, Morgan Stanley analysts said on Monday.
Copper prices HG00, +0.21% rallied at the end of last year and into 2021, hitting $3.696 a pound — their highest level since 2013, having dropped to four-year lows in March 2020. Equities exposed to copper have enjoyed the recovery but Morgan Stanley said there was still more to come.
Despite average total shareholder returns of nearly 63% since the beginning of 2020, the investment bank’s equity analysts said they continue to see a positive risk-reward for copper-exposed equities.
They cited a number of tailwinds, including an accelerating economic cycle and expected reflation, which “strongly favors copper.”
“As such, we argue that there is a further 30% upside to current share prices should spot commodity prices persist through 2021,” they said in a note.
Copper’s role in the global shift toward a lower carbon economy was another reason to be positive. Its position as a key enabler of decarbonization and electrification transition offers a “compelling secular growth angle as investor focus on climate change continues to grow,” the analysts said.
“Against this backdrop, we would use potential market volatility around Chinese New Year over the next month as a buying opportunity with a bullish 2021 outlook in sight,” they added.