Teck favored over Freeport Freeport McMoRan (NYSE:FCX) slips in Thursday's trading despite winning an upgrade to Neutral from Underperform with a $38 price target, raised from $32, at Credit Suisse, which says the copper sector's risk/reward is now "neutral to bullish" and that copper prices should remain well supported in the medium term.
"In a stagflation environment, we would expect copper prices to remain very well supported even as supply/demand balances pivot to greater surplus as global demand concerns escalate owing to sharp increases in interest rates, exhaustion of stimulus and late cycle demand dynamics," analyst Curt Woodworth writes.
However, Woodworth says his "best idea" in the space is Teck Resources (TECK), citing "industry leading copper growth with low capital intensity."