It’s time to think about growth, which is exactly what analysts have been doing in the start of 2024. Specifically, they have been looking at sectors that have a lot of promise in 2024 and beyond. And one of those sectors includes copper.
In a recent research report, one analyst stated that copper could be quite bullish moving forward. So, let’s look at why and what stocks investors should keep on their radar right now.
More than we thought
Originally, analysts believed that supply-chain disruptions from a close of the Cobre Panamá would decrease the guidance set out by several copper companies. However, there continues to be soft demand in 2024, and therefore supply disruptions look less likely. This could support copper prices through 2024, and keep them higher than originally thought.
What’s more, copper looks like it has quite a favourable long-term outlook, according to analysts. This certainly is connected to the renewable energy transition. Right now, there has been a near-term shortfall in renewable energy projects around the world. However, once that changes and the investment starts up, copper is going to see a huge increase in demand. And supply shortfalls could increase the price significantly.
Some of the best companies that are situated for growth come from those that have transformed to more of a copper investment and remain valuable. In fact, we could even see some acquisitions come out way in the next few years. For now, there are two strong options for investors to consider on the TSX today.
Capstone Copper
First up, Capstone Copper (TSX: CS) maintains an outperform rating by analysts, with recent potential price targets rising again and again. Analysts specifically like Capstone stock for its positive long-term growth outlook. There continue to be several expansion opportunities, and this could even create cost savings in the future.
That would come through with the company’s Mantoverde-Santo Domingo district integration plan, creating cost savings in the years to come. These expansion projects are due to come online in 2024, and, therefore, Capstone stock should be on investor radars — especially as copper prices continue to improve.
So, with much in the pipeline, a strong management team, and more growth initiatives, Capstone stock looks like a solid buy — especially while trading at 2.47 times sales and with shares up 11% in the last year. Investors are looking for more growth at a great price.
Teck stock
Another strong option identified by analysts is Teck Resources (TSX: TECK.B). Again, analysts have been raising their price target, marking the stock to outperform throughout 2024. This specifically comes from the company’s history of strong financial performance, as well as its strong growth outlook for its copper pipeline.
The company divested its steelmaking coal business last year, and in 2024, this should provide some serious cash flow for the stock. Teck stock will therefore have quite a strong balance sheet this year and aims to use it to deliver in the “next leg of copper growth,” one analyst stated.
Furthermore, Teck stock should also use that cash to return it to shareholders! Therefore, it remains a strong stock with growth in the future and cash today. Expansion may also include more than copper, as the company invests in many areas of basic materials. Furthermore, it continues to provide value trading at 12.59 times earnings, up just 2% in the last year. Add on a nice little 0.93% dividend yield, and you’ve got yourself a deal!
