Copper Fever Cools. The Case to Sell This Mining Stock.

President Donald Trump’s promised 50% tariff on imported copper sent benchmark copper prices to about $5.60 a pound from $4.80 a pound in recent days. (Qilai Shen/Bloomberg)

Copper prices have been on a stellar run, boosted by President Donald Trump’s proposed tariffs. But Wall Street sees headwinds for the metal, with two miners catching downgrades.

Shares of Freeport-McMoRan and Southern Copper fell Tuesday after Morgan Stanley analyst Carlos De Alba cut his ratings for the stocks.

De Alba bumped Freeport to Hold from Buy and took his price target up to $54 a share from $45.

Freeport stock lost 3.2%, closing at $44.12, while the S&P 500 and Dow Jones Industrial Average dropped 0.4% and 1%, respectively.

A downgrade with a price target increase shows what shares have been doing. Coming into Tuesday trading, Freeport stock was up about 36% over the past three months, boosted by President Donald Trump’s proposed 50% tariff on imported copper, set to take effect in August, which sent benchmark copper prices to about $5.60 a pound from $4.80 a pound.

Created with Highcharts 9.0.1Copper StocksSource: FactSet

Created with Highcharts 9.0.1May 2025July-10-5051015202530354045%Freeport-McMoRan Inc.Southern Copper Corp.S&P 500 Index

The U.S. produced about 890,000 metric tons of refined copper in 2024, according to the USGS, roughly half of the country’s consumption.

Like with Freeport, De Alba cut his rating—to Sell from Hold—and raised his price target—to $99 a share from $86.

Southern Copper shares fell 2.4% to $97.54.

In both cases, De Alba cited concerns about macroeconomic growth and valuation. In April, Southern Copper shares traded for about 17 times estimated 2026 earnings, according to FactSet. Now, they trade for about 22 times. Freeport’s price-to-earnings ratio went to 19 from 13 over the same span.

As for demand, Citi analyst Tom Mulqueen noted in a Tuesday report that tariffs and policy changes will be a headwind in the second half of 2025.

“We also see sustained sluggish manufacturing activity and solar frontloading weighing on copper end-use consumption in the months ahead,” wrote Mulqueen. Frontloading refers to demand being pulled ahead as solar manufacturers tried to get ahead of renewable policy changes in the U.S. and elsewhere.

He sees copper prices falling to about $4 per pound in the coming three months.

Created with Highcharts 9.0.1Copper Continuous ContractSource: FactSet

Created with Highcharts 9.0.1May 2025July4.44.64.85.05.25.45.6$5.8 per pound

Overall, 65% of analysts covering Freeport rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Freeport stock is about $51 a share.

Only about 16% of analysts covering Southern Copper rate shares Buy. The average analyst price target is about $93 a share.

Write to Al Root at allen.root@dowjones.com