Jefferies: Only 4 Buys in the Metals & Mining Space

Analysts at Jefferies are bearish on mining shares in the near term, noting that they revised many of their commodity price forecasts lower. However, the firm does put four metals and mining stocks above the rest: Antofagasta plc ANFGY, First Quantum Minera FQVLF, Freeport-McMoRan Inc FCX, and Rio Tinto plc RIO.

Of these, Jefferies chose Freeport as "one of our top picks in the sector," with a $27 price target on the stock. At the same time, the firm recently downgraded Peabody Energy Corporation BTU from a Buy to a Hold and cut the price target to $6.

Jefferies said it is the most cautious on iron ore miners, while the firm said that "copper miners are best positioned." Rio Tinto is the only recommended buy in the iron ore sector – a fact that reflects Jefferies belief that iron ore prices are likely to fall farther. Though the analysts also cut their 2015 and 2016 copper prices, they are more bullish into 2017 and 2018. And, while the firm does expect the price of gold to rise, it says that gold miners are "not cheap enough to buy."