Goldman Sachs Lowers FCX Estimates, PT Drops To $127

Goldman Sachs is lowering its 2011/12 estimates for Freeport-McMoRan Copper & Gold FCX to $11.35/$11.45 from $12.75/$12.00 on lower volume assumptions and higher costs as highlighted by Freeport in its 2011 guidance. “Higher costs are primarily a function of lower production volume at Grasberg for the next two years due to mine sequencing,” Goldman Sachs writes. “As volume bounce back in 2012, per unit cost would go down to more normal level. The above estimate changes lower our 6-month P/E, EV/EBITDA and NAV based target price for FCX by 4% to $127 from $132 and we reiterate our Buy rating.” Freeport-McMoRan Copper & Gold closed Thursday at $110.90.