Freeport-McMoRan (FCX) Surges 7.6%: Is This an Indication of Further Gains?

Freeport-McMoRan (FCX) shares ended the last trading session 7.6% higher at £43.41. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 10.1% gain over the past four weeks.

FCX's rally appears to be driven by a surge in copper prices as China's biggest copper smelters agreed to reduce production. Copper prices surged to their highest level in seven months in London yesterday after Chinese smelters agreed on a joint production cut, per Reuters. China's top smelters agreed to cut production at some loss-making plants driven by a shortage of raw material, Reuters noted.

This mining company is expected to post quarterly earnings of £0.36 per share in its upcoming report, which represents a year-over-year change of -30.8%. Revenues are expected to be £5.64 billion, up 4.8% from the year-ago quarter. Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Freeport-McMoRan, the consensus EPS estimate for the quarter has been revised 2.9% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on FCX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Freeport-McMoRan is part of the Zacks Mining - Non Ferrous industry.

Energy Fuels (UUUU), another stock in the same industry, closed the last trading session 3.1% lower at £5.95. UUUU has returned -7% in the past month. Energy Fuels' consensus EPS estimate for the upcoming report has changed +120% over the past month to £0.01.

Compared to the company's year-ago EPS, this represents a change of +200%. Energy Fuels currently boasts a Zacks Rank of #2 (Buy). Story continues

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