UBS analysts have upgraded First Quantum Minerals (TSX:FM) to ‘Buy’ from ‘Neutral,’ citing improving risk-reward dynamics and the anticipated restart of the Cobre Panama (CP) copper mine, located in Panama.
The investment bank also raised its 12-month price target to C$50 per share, up from C$38, and above current levels of about $34.
The analysts highlighted the restart of CP as “the key driver of the stock,” adding that the operation is “increasingly likely in 2026 with the results of the integral audit to be published in April and CP set to start processing stockpiled ore over the next 3 months.” The firm also pointed to a recent expert call supporting the view that CP will fully resume production this year.
UBS wrote that once CP is operational, it expects First Quantum to benefit from a stronger balance sheet and attractive growth optionality. The analysts noted that the company is “a good operator (and builder) of high-quality copper assets” and that the stock is currently trading at around 4.5x 2027 enterprise value (EV)/earnings before interest, taxes, depreciation and amortization (EBITDA).
UBS’s valuation reflects a 7x EV/EBITDA multiple and incorporates 50% of CP’s net present value.
Two near-term catalysts were highlighted by the firm: the results of an audit by SGS, expected in April, and the formal approval from the Panamanian government for CP to process stockpiled ore.
“In our opinion, this is a material step towards a full restart, allowing FM to start testing the plant equipment which has been idled for 2.5 years,” the analysts wrote.
UBS acknowledged that the economics of the updated agreement remain somewhat more onerous than previous arrangements. The bank’s base case assumes an increase in the effective tax rate to roughly 45% and that the government will assume a 10% equity stake in CP.
Looking beyond CP, UBS expects the mine’s restart to broadly double First Quantum’s copper production and EBITDA by 2027 while reducing leverage. Management plans to keep a stronger balance sheet going forward, advancing new growth projects only when net debt to EBITDA is around 1x, adding that the company may then pursue the Taca Taca project in Argentina in the second half of 2027, likely in partnership with another investor.
The analysts also said they remain “constructive on the outlook for copper and expect the impact of Middle East conflict to be modest,” while adjusting earnings estimates to reflect a slower-than-anticipated CP startup.