Scotiabank downgrades Freeport on ‘significant overhang’ from mudslide

Scotiabank last night downgraded Freeport-McMoRan (FCX) to Sector Perform from Outperform with a price target of $45, down from $55. The firm cites the mud rush incident at the company’s Grasberg Block Cave Cu-Au mine in Indonesia for the downgrade. The stock dropped 17% on Wednesday but Scotiabank’s 2025 and 2026 EBITDA estimates declined by an average of 27%, the analyst tells investors in a research note. In addition, the firm no longer expects a positive free cash flow inflection and a meaningful pickup in Freeport’s buyback program in 2026. It sees a “significant overhang on the shares” pending more clarity on the full impact of the event.