NEW YORK (TheStreet) -- J.P. Morgan Chase (JPM) - Get Report is becoming increasingly cautious on the metals and mining sector.

"We believe that a strong dollar and weak oil prices will continue to weigh on demand (and prices) for most metals at a time when Chinese growth (and metals consumption) is slowing and Russian exports are increasing," writes J.P. Morgan equity analyst Michael Gambardella.

"In the U.S., we are not looking for a material increase in steel prices, as we think imports will remain elevated and scrap prices depressed. With the drop in scrap prices, minimills are now the low cost producer, and we think they could use their cost advantage to take share from the integrateds and imports," he continues in a note to clients.

"With this outlook, we continue to recommend a near-term pair trade of long sheet minimills Nucor Corp. (NUE) - Get Report and Steel Dynamics (STLD) - Get Report and short integrateds AK Steel (AKS) - Get Report and United States Steel (X) - Get Report," the note said.

Separately, the bank's commodities analysts slashed their price forecasts for several base metals, which caused Gambardella to slash forecasts for four other stocks in the sector.

J.P. Morgan's commodities team lowered 2015 and 2016 forecasts for:

Aluminum to $0.84/lb from $0.88/lb for 2015 and $0.89/lb from $0.98/lb in 2016;
Copper to $2.72/lb from $2.81/lb for 2015 and to $2.86/lb from $3.04/lb in 2016;
Nickel to $6.80/lb from $7.92/lb in 2015 and $8.50/lb from $9.98/lb in 2016; and
Gold to $1,118/oz from $1,233/oz in 2015 and $1,168/oz from $1,200/oz in 2016.

Gambardella reduced earnings estimates on -- Alcoa (AA) - Get Report, Century Aluminum Co. (CENX) - Get Report, Freeport-McMoran Inc. (FCX) - Get Report and Thompson Creek Metals Company Inc. (TC) - Get Report based on the lower metals price forecasts and removed Molycorp. (MCP) from its focus list.

Here's a closer look at J.P. Morgan's view on the stocks mentioned. We paired J.P. Morgan's changes with TheStreet Ratings for comparison.

TheStreet Ratings, TheStreet's proprietary ratings tool, projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Check out J.P. Morgan's expanded investment theses on these nine stocks. And when you're done be sure to read about which apparel stocks you should clear out of you portfolio. Year-to-date returns are based on March 30, 2015 closing prices.

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AKS

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1. AK Steel Holding Corp. (AKS) - Get Report
Market Cap: $789 million
Year-to-date return: -22%
J.P. Morgan Rating/Price Target: Neutral/NA

J.P. Morgan lowered its 2015 estimates to a loss of $1.36 a share from a loss of 14 cents a share and 2016 estimates to a profit of 30 cents a share from 50 cents a share. Consensus estimates are calling for a loss of 35 cents a share for 2015 and a profit of 37 cents a share in 2016.

J.P. Morgan said: We rate AKS Neutral. AK's move to backwardly integrate part of its iron ore and coal needs is being put to the test as spot prices of these raw materials drop. We expect that AK will probably be asked to help fund Magnetation's capital shortfall. Reduced pension and OPEB obligations should provide a benefit to cash flows over time. Finally, Dearborn should drive earnings higher next year and provide more operational flexibility to AK's carbon steel operations. However, we remain Neutral on AKS given uncertainty around just how much Dearborn will contribute (from both a base earnings and expected synergies perspective) and due to our continued cautious outlook for steel prices given the anticipated drop in scrap pricing. AK (with its more fixed cost structure as an integrated producer) remains more exposed to the continued pressure on steel prices that we think will come from a high levels of imports, depressed raw material costs, and a stronger U.S. dollar.

Over the next several quarters, AK should be negatively impacted by the flow through of lower selling prices, which tend to lag the market given AK's contracted business. We expect EPS to return to profitability in 2016 on a modest increase in shipments and improved price/cost spread. The company is currently trading at 2015E and 2016E EV/EBITDA multiples of 15.2x and 6.8x, respectively, compared to its average forward multiple of 5.5x.

TheStreet Ratings: Sell, D+
TheStreet Ratings said:
"We rate AK STEEL HOLDING CORP (AKS) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, poor profit margins, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Metals & Mining industry. The net income has significantly decreased by 61.6% when compared to the same quarter one year ago, falling from $35.20 million to $13.50 million.
  • The gross profit margin for AK STEEL HOLDING CORP is currently extremely low, coming in at 10.07%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.67% trails that of the industry average.
  • Net operating cash flow has decreased to $57.80 million or 49.07% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, AK STEEL HOLDING CORP has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 35.34%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 73.07% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • AK STEEL HOLDING CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, AK STEEL HOLDING CORP reported poor results of -$0.74 versus -$0.34 in the prior year. This year, the market expects an improvement in earnings (-$0.30 versus -$0.74).
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NUE

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2. Nucor Corp. (NUE) - Get Report
Market Cap: $15.1 billion
Year-to-date return: -3.5%
J.P. Morgan Rating/Price Target: Overweight/$54

J.P. Morgan lowered its 2015 earnings estimates to $1.62 a share from $2.50 a share, but raised 2016 estimates to $3.57 a share from $3.41 a share. Consensus estimates are calling for $2.03 a share for 2015 and a profit of $3.17 a share in 2016.

J.P. Morgan said: We rate shares of Nucor Overweight and are raising our Dec-15 price target to $54 from $52. Nucor has consistently grown throughout the steel cycle, emerging more profitable and diversified each time; we believe the current cycle is no different. Notably, plans to leverage DRI technology should increase the company's raw material integration and reduce historical volatility by leveraging low natural gas prices locked in for the next 20 years under two long-term working interests with Encana. In our view, Nucor's solid balance sheet (28% net debt/capital), 3% dividend yield, flexible cost structure, and continued focus on innovation merit a premium valuation multiple, as it presents an attractive mix of long-term earnings growth and short-term flexibility to navigate increasingly volatile trends in steel prices, sentiment, and demand.

A couple of weeks ago, management guided 1Q15 EPS to fall in the range of $0.10-$0.15, and we have lowered our realized sheet prices to reflect lower sheet prices. However, we expect NUE to start seeing the benefit of much lower scrap raw material costs in 2Q15. NUE's newly found cost advantage thanks to lower scrap prices should drive earnings improvement into 2016. Our December 2015 price target increases to $54 from $52.

TheStreet Ratings: Buy, B
TheStreet Ratings said:
"We rate NUCOR CORP (NUE) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 18.7%. Since the same quarter one year prior, revenues slightly increased by 2.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income increased by 23.4% when compared to the same quarter one year prior, going from $170.49 million to $210.43 million.
  • Net operating cash flow has significantly increased by 114.77% to $417.34 million when compared to the same quarter last year. In addition, NUCOR CORP has also vastly surpassed the industry average cash flow growth rate of -45.85%.
  • Despite currently having a low debt-to-equity ratio of 0.59, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NUE's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.55 is high and demonstrates strong liquidity.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, NUCOR CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
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STLD

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3. Steel Dynamics (STLD) - Get Report
Market Cap: $4.8 billion
Year-to-date return: 2.4%
J.P. Morgan Rating/Price Target: Overweight/$25

J.P. Morgan lowered its 2015 earnings estimates to $1.44 a share from $1.72 a share, but raised 2016 estimates to $2.77 a share from $2.46 a share. Consensus estimates are calling for earnings of $1.35 a share for 2015 and $2.01 a share in 2016.

J.P. Morgan said: We rate STLD Overweight with a $25 price target. Earnings should be driven higher by the company's Columbus acquisition (which should also allow the company to expand its presence into new markets and products without adding additional capacity into the market), expansion opportunities in its Steel operations, lower costs at its Minnesota operations, and steadily improving results in its Fabrication operations. Additionally, any rebound in non-residential construction activity could also provide a significant boost to the company's earnings, as STLD's nonresidential construction-related steel business is still well below levels seen over the 2005-2007 time frame.

The decrease in our 2015 estimates is to reflect the near-term metal spread compression STLD should see in its earnings as steel prices fell before scrap costs. We are increasing our second half 2015 and 2016 estimates, however, on improved metal spreads and as STLD should be able to use its low cost advantage to take share from the integrated producers and imports. We are increasing our December 2015 price target to $25 from $23 and adding STLD to J.P. Morgan's US Equity Analyst Focus List.

TheStreet Ratings: Hold, C+
TheStreet Ratings said:
"We rate STEEL DYNAMICS INC (STLD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 35.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 380.68% to $319.58 million when compared to the same quarter last year. In addition, STEEL DYNAMICS INC has also vastly surpassed the industry average cash flow growth rate of -45.85%.
  • The gross profit margin for STEEL DYNAMICS INC is rather low; currently it is at 15.33%. Regardless of STLD's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, STLD's net profit margin of -1.78% significantly underperformed when compared to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 182.4% when compared to the same quarter one year ago, falling from $54.66 million to -$45.03 million.
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X

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4.

United States Steel Corp. (X) - Get Report
Market Cap: $3.6 billion
Year-to-date return: -4.9%
J.P. Morgan Rating/Price Target: Neutral/$23

J.P. Morgan lowered its 2015 estimates to a loss of 25 cents a share from a profit of $1.57 a share, and lowered 2016 estimates to $1.42 a share from $3 a share. Consensus estimates are calling for earnings of $1.16 a share for 2015 and $2.11 a share in 2016.

J.P. Morgan said: We view U.S. Steel as the most levered domestic stock to a steel recovery or decline given its higher fixed costs from backward integration into iron ore. As a result, X's stock price tends to outperform during periods of high raw material price inflation - something we view as unlikely given moderating bulk commodity demand growth from China and increased seaborne supplies. Against this backdrop of lower raw material prices and increasing frequency of steel price "mini-cycles," U.S. Steel will not likely enjoy the necessary preconditions to flex its historical earnings leverage. In our view, the company's relatively new management team recognized the same conditions and undertook a company-wide "margin improvement" (cost cutting) program, which has generated positive results in recent quarters. In addition, the improved earnings and greater focus on cash generation substantially improved the company's cash position, which, in our view, could help fund investments to grow and not just maintain earnings power. Despite these improvements, we still favor mini-mills Nucor and Steel Dynamics as lower scrap prices have shifted the competitive dynamics in favor of U.S. mini-mills, which are now the low-cost sheet producers. Furthermore, NUE and STLD have more exposure to an eventual construction recovery, less levered balance sheets, defined growth plans and greater operating flexibility with their more variable cost structure to navigate future steel mini-cycles.

Our December 2015 price target declines to $23 from $26. We are reducing Flat Rolled shipments by 15% sequentially in 2Q15, versus flat before, which lowers 2015 shipments to 9.2 million tons, versus 11.0 million tons before. We are also reducing 2016 shipments to 10.8 million tons compared to our previous forecast of 13.5 million tons. We expect Flat Rolled average realized price to fall to $730/ton from $749/ton in 2015 and to $736/ton from $753/ton in 2016. In Tubular, with significantly lower oil prices and the resulting decline in rig count, we anticipate shipments to fall meaningfully to 0.9 million tons/1.2 million tons from 1.2 million tons/1.5 million tons in 2015/2016. We are also lowering our Tubular average realized price in 1Q15. X should feel the brunt of the macro headwinds in 2Q15 and 3Q15 given the natural lag in the business.

TheStreet Ratings: Hold, C
TheStreet Ratings said:
"We rate UNITED STATES STEEL CORP (X) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the Metals & Mining industry average, but is less than that of the S&P 500. The net income increased by 1.9% when compared to the same quarter one year prior, going from $270.00 million to $275.00 million.
  • Net operating cash flow has significantly increased by 3600.00% to $245.00 million when compared to the same quarter last year. In addition, UNITED STATES STEEL CORP has also vastly surpassed the industry average cash flow growth rate of -45.85%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, UNITED STATES STEEL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The gross profit margin for UNITED STATES STEEL CORP is currently extremely low, coming in at 14.73%. Regardless of X's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.75% trails the industry average.
  • X has underperformed the S&P 500 Index, declining 8.95% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
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AA

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5. Alcoa (AA) - Get Report
Market Cap: $15.7 billion
Year-to-date return: -18%
J.P. Morgan Rating/Price Target: Neutral/$16.50 from $18.50

J.P. Morgan cut its 2015 earnings estimate to $1 from $1.16 a share and 2016 estimates to $1.10 from $1.59 a share based on lower aluminum forecasts. Consensus estimates are $1.07 and $1.27, respectively.

J.P. Morgan said: We rate Alcoa Neutral given a cautious outlook for aluminum prices and premiums. We do think AA is in a much better position now to deal with lower aluminum premiums and prices than it was several years ago. The company has considerably grown its downstream businesses and is therefore simply less exposed to swings in the underlying commodity prices. Additionally, Alcoa has taken significant steps to meaningfully reduce its cost structure in its upstream segments so that it can now better weather weaker commodity price environments. However, we think a Neutral rating is warranted given our metal strategist's concern that aluminum premiums could continue falling and given just how much aluminum premiums have increased over the past several years (U.S. premiums currently up more than 200% over levels seen at the beginning of 2012).

TheStreet Ratings: Buy, B-
TheStreet Ratings said:
"We rate ALCOA INC (AA) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 14.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ALCOA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, ALCOA INC turned its bottom line around by earning $0.19 versus -$2.15 in the prior year. This year, the market expects an improvement in earnings ($1.10 versus $0.19).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 106.8% when compared to the same quarter one year prior, rising from -$2,339.00 million to $159.00 million.
  • Net operating cash flow has significantly increased by 58.47% to $1,458.00 million when compared to the same quarter last year. In addition, ALCOA INC has also vastly surpassed the industry average cash flow growth rate of -45.85%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
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CENX

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6. Century Aluminum Co.

(CENX) - Get Report

Market Cap: $1.2 billion
Year-to-date return: -40.4%

J.P. Morgan Rating/Price Target: Underweight/$8

J.P. Morgan cut its 2015 earnings estimate to 27 cents a share from $1.06 a share and 2016 estimates to 41 cents a share from $2.75 based on lower aluminum forecasts. Consensus estimates are $1.99 a share and $2.20 a share, respectively.

J.P. Morgan said: We retain our Underweight rating on Century Aluminum and once again lower our price target to $8 from $14. Our new PT reflects JPM Commodity Research team's lowered aluminum price forecasts and our lower Midwest premium estimates. We expect the company's earnings to come under severe pressure in this challenging market environment. While Century has lowered its breakeven point by improving the cost structure at several facilities, cash costs are expected to increase in 2015, as a new contract switched the alumina pricing to be based off of the index price instead of as a % of LME, thereby compressing margins yoy. Management is focused on upgrading product mix, targeting 60% of production to be value-added products in 2015. Management is also expanding capacity where available - tonnes previously tolled at Grundartangi are targeted directly as primary sales, a trend that should continue through mid-2016 when the last tolling agreement expires. However, given the near-term risks to earnings from lower aluminum prices and regional premiums, we remain cautious on the stock.

TheStreet Ratings: Buy, B
TheStreet Ratings said:
"We rate CENTURY ALUMINUM CO (CENX) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 18.7%. Since the same quarter one year prior, revenues rose by 37.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CENTURY ALUMINUM CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CENTURY ALUMINUM CO turned its bottom line around by earning $1.13 versus -$0.46 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $1.13).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 739.3% when compared to the same quarter one year prior, rising from -$9.68 million to $61.85 million.
  • Net operating cash flow has significantly increased by 534.02% to $98.70 million when compared to the same quarter last year. In addition, CENTURY ALUMINUM CO has also vastly surpassed the industry average cash flow growth rate of -45.85%.

7. Freeport-McMoran Inc. (FCX) - Get Report
Market Cap: $19.7 billion
Year-to-date return: -17%
J.P. Morgan Rating/Price Target: Overweight/$23

J.P. Morgan cut its 2015 earnings estimate to 68 cents from 90 cents a share and 2016 estimates to $1.74 from $2.28 a share based on lower copper and gold price forecasts. Consensus estimates are 81 cents a share and $2.24 a share, respectively.

J.P. Morgan said: We rate FCX OW (with a December 2015 price target of $23) given its leverage to the higher long-term copper prices our commodity strategists are forecasting through its solid lower risk, lower cost production growth. We believe additional positive catalysts could be debt reduction, divestiture of certain oil & gas assets, the sale of a minority stake of the Grasberg mine, or sale of other mining assets. While uncertainty around potential changes to FCX's contract of work with the Indonesian government is likely acting as an overhang on the stock, we continue to believe that FCX will be able to achieve a resolution that does not materially impact the value of its Indonesian assets. The resolution of this key uncertainty should act as a positive catalyst for the stock, in our view.

TheStreet Ratings: Sell, D+
TheStreet Ratings said:
"We rate FREEPORT-MCMORAN INC (FCX) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 503.4% when compared to the same quarter one year ago, falling from $707.00 million to -$2,852.00 million.
  • The debt-to-equity ratio of 1.04 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, FCX has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, FREEPORT-MCMORAN INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Net operating cash flow has significantly decreased to $1,118.00 million or 53.33% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, FREEPORT-MCMORAN INC has marginally lower results.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 38.47%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 504.41% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
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TC

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8. Thompson Creek Metals Company Inc. (TC) - Get Report
Market Cap: $287.2 million
Year-to-date return: -21%
J.P. Morgan Rating/Price Target: Neutral/$23

J.P. Morgan cut its 2015 estimate to a loss of 9 cents from a loss of 5 cents a share and 2016 estimates to 4 cents of profit from 11 cents a share based on lower copper and gold price forecasts. Consensus estimates are 2 cents a share and 11 cents a share, respectively.

J.P. Morgan said: We continue to expect TC's Mt. Milligan project to drive earnings growth going forward, be a low-cost copper producer, and create a more diversified asset base, all of which should drive incremental value for the company. However, we remain Neutral as using current spot prices for copper, gold and moly drops our NPV to roughly ($0.42) and given the uncertainty around the potential impact that increases in moly supply next year could have on moly price as well as risks with ramping Mt. Milligan to full production.

TheStreet Ratings: Sell, D
TheStreet Ratings said:
"We rate THOMPSON CREEK METALS CO INC (TC) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally high debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TC's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 34.73%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The debt-to-equity ratio of 1.06 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, TC has managed to keep a strong quick ratio of 1.78, which demonstrates the ability to cover short-term cash needs.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Metals & Mining industry and the overall market, THOMPSON CREEK METALS CO INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly increased by 199.14% to $34.90 million when compared to the same quarter last year. In addition, THOMPSON CREEK METALS CO INC has also vastly surpassed the industry average cash flow growth rate of -45.85%.
  • THOMPSON CREEK METALS CO INC has improved earnings per share by 49.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, THOMPSON CREEK METALS CO INC continued to lose money by earning -$0.63 versus -$1.28 in the prior year.
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MCP

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9. Molycorp Inc. (MCP)
Market Cap: $104 million
Year-to-date return: -58%
J.P. Morgan Rating/Price Target: Underweight (removed from Focus List)/NA

No estimate changes. J.P. Morgan forecasts a 2015 loss of 60 cents a share and a 2016 loss of 39 cents a share for Molycorp, in line with 2015 and 2016 consensus estimates.

J.P. Morgan said: Post the company's Q4 results, we are very concerned that MCP could have to address its capital structure/liquidity even sooner than we had previously expected. With our forecasts, which we think give MCP the benefit of the debt, we believe the company will struggle to generate two consecutive quarters of adjusted EBITDA of over $20mm by April 2016 in order to be able to draw on the additional $150mm of financing from Oaktree and will struggle to repay the portion of its convertible notes required to avoid the springing maturities associated with the Oaktree financing. We remain Underweight, as we still see significant downside for MCP's stock. Our NPV currently sits at negative $3.35 per share, using what we view as realistic if not optimistic assumptions for rare earth prices, cash costs at Mt. Pass, and profit levels in the company's downstream operations. However, we don't see any value left for equity holders given the series of increasingly expensive capital raises the company has undertaken over the past four years.

TheStreet Ratings: Sell, D
TheStreet Ratings said:
"We rate MOLYCORP INC (MCP) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally high debt management risk and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Metals & Mining industry. The net income has significantly decreased by 69.7% when compared to the same quarter one year ago, falling from -$194.31 million to -$329.79 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, MOLYCORP INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to -$75.80 million or 17.81% when compared to the same quarter last year. Despite a decrease in cash flow MOLYCORP INC is still fairing well by exceeding its industry average cash flow growth rate of -45.85%.
  • Currently the debt-to-equity ratio of 1.97 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, MCP has managed to keep a strong quick ratio of 2.33, which demonstrates the ability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 92.65%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 52.12% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.