Barlow’s Research Roundup: Attractive entry point for these copper stocks

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Copper miners oversold

RBC Capital Markets analyst Sam Crittenden sees an attractive entry point for copper stocks,

“Copper equities sold off this past week alongside the underlying commodity, but to a lesser extent. While copper prices fell 1.8 per cent week-over-week, copper equities dropped 10.9 per cent w/w, our worst-performing tracked asset class of the week. This leaves valuations looking cheaper. On inventory flows, Comex hit an all-time high of 601kt (up 12.0 per cent w/w) as metal continues flowing into U.S. exchanges ahead of the Commerce Department’s copper tariff recommendation by June 30, while Shanghai tightened to 336kt (down 4.5 per cent w/w). In China, spot TC/RCs [refining costs] hit a new all-time low of -$128/mt signaling continued tightness in the concentrate market … aken together, a persistently tight Chinese concentrate market, ongoing U.S. tariff speculation, and an outsized equity sell-off point to an attractive entry point for copper equities, in our view”

RBC has “sector outperform ratings” on First Quantum Minerals Ltd. (with a ‘speculative’ tag) (FM-T), Capstone Copper Corp. (CS-T), and Hudbay Minerals Inc. (HBM-T).

Choppy U.S. market ahead

BofA Securities U.S. equity and quant strategist Savita Subramanian’s outlook for the second half is a bit confusing. It sounds bullish on the surface but she expects the S&P 500 to fall about 5.0 percent,

“We maintain our initially launched (see our note:) S&P 500 2026 year-end target of 7100 (5-per-cent downside from current levels), with a range across our models from ~6000 to 8000. The S&P 500’s lofty multiple has been, in our view, justified by asset-lightness, balance sheets, capital discipline and earnings quality. Corporates navigated a jump in rates by pulling cash forward and shortening duration risk via buybacks, cost-cutting and efficiency measures. Equity supply/demand dynamics peaked in bullishness in 2025, with liquidity coming from every channel –easy central banks, accelerating earnings, accelerating buybacks, individual and institutional investor inflows, US government inflows and a spike in take-privates amid a dearth of IPOs. Today, these levers are reversing … The BofA house view has moved to three 25bp Fed hikes in 2026, reflecting stickier inflation and tighter labor markets across large U.S. sectors. A flatter curve is anticipated (and note that bear flatteners [short rates climbing, longer-term rates falling] have been the second worst phase for the S&P 500 … Long-term growth expectations haven’t been recalibrated, so the current risk/reward in cyclical capex beneficiaries is strong. Cyclicals’ expectations are lower, their cash return/value characteristics have performed well during prior tightening cycles, and inflation has been more positive than negative for earnings in these groups”

Bullish on ferts

Scotiabank analyst Ben Isaacson is bullish on the fertilizer sector,

“We recommend investors Overweight the ferts, as crops, fertilizers, and the equities are all bottoming at the same time. First, on the macro, we see upside price risk to grain/oilseeds markets mid-term, largely on reduced planted acreage, yield risk on insufficient N+P [nitrogen and phosphorus] application, severe drought risk this summer, and now a Super El Niño on the way. Consider new crop corn at $4.30/bu vs. production costs 10 per cent to 15 per cent higher . Second, on the ferts, urea has overshot to the downside, ammonia remains demand-driven, for now, P margins should recover on costs falling faster than prices (a temp P CVD suspension is irrelevant near-term), and K [potassium] remains stable, though could soften a touch into ‘27. Third, most of the equities are down 25 per cent to 30 per cent recently, as investors exited/shorted on the Iran war unwind + the seasonal withdrawal of NPK demand. Finally, and as we see the crops, the ferts, and the stocks all bottoming, we recommend value-seeking contrarians overweight the ferts, especially as over-earnings and Hormuz risks are now joined at the hip We have upgraded CF and NTR to Buy from Hold, and have upgraded K+S to Hold from Sell. We also rate MOS as a higher risk/reward Buy and maintain a Hold on YA”

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