Analyst coverage is certainly one of the most important factors to consider when evaluating an investment. If a stock has suddenly garnered Wall Street’s confidence, particularly after a period of underperformance, that’s a pretty strong indicator that there’s a solid reason as to why researchers have turned bullish.
Everything we’ve just said still holds true, to an even greater extent, on a larger scale — when looking at sectors. It’s quite rare to see Wall Street firms reverse their stance on entire industries as sharply as they do with equities, but it has been known to happen, and it happened very recently.
To be more precise, on March 24, JPMorgan issued a revised outlook on the mining and metals sector, to which it had, up to this point, been giving an ‘underweight’ rating. What’s more, the banking giant upgraded the sector straight to its highest possible rating — ‘overweight’.
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At present, JPMorgan is expecting that nothing less than a “V-shaped” recovery will begin by the end of Q1 2025. For reference, the first quarter of the year will end just five days from the time of publication. Let’s take a closer look at the firm’s outlook — and how investors can position themselves to benefit.
Why JPMorgan reversed course on the mining and metals sector
First, let’s deal with JPMorgan’s reasoning. The banking giant’s analysts noted that mining stocks have lagged industrial metal prices by roughly 20% since early 2024.
A large disparity between the S&P Metal and Mining Select Industry Index and the S&P 500 also exists. The former has provided a 2.01% return compared to this time a year ago, while the latter has surged by 10.42% in the same period of time.
The firm cited improving fundamentals, a projected rebound in commodity prices, and the recent Chinese stimulus measures as key drivers behind the decision.
The banking giant recommends going long on copper and gold stocks
Now, let’s move on to specifics. JPMorgan is particularly bullish on stocks in the mining and metal sector with strong exposure to copper, aluminium, and gold. It holds a particularly optimistic long-term view on copper, projecting that supply-demand dynamics and low inventories will cause a 15% increase in the metal’s price by Q2 2026.
On top of that, it also predicts a 10% to 20% increase in EBITDA estimates for mining companies at present prices, but expects that gold producers will be the largest beneficiaries.
Similar bullish sentiments regarding copper were recently shared by commodities veteran Jeff Currie, while Bloomberg senior commodity strategist Mike McGlone shared a thesis that sees declining treasury yields and cryptocurrency outflows pushing the price of gold to $4,000.
An exchange-traded fund (ETF) would be the simplest way to benefit (assuming that JPMorgan made the right call). While the firm did lay out several individual stock picks, only one trades on major U.S. exchanges — and it happens to offer exposure to both of the aforementioned commodities.
Rio Tinto stock (NYSE: RIO) has outperformed the wider market thus far in 2025, having secured a 7.02% return since the start of the year. At press time, RIO stock was changing hands at a price of $62.94.
What’s more, JPMorgan’s bullish appraisal isn’t a fringe opinion — at present, Wall Street analysts project an average upside of 21.72% for RIO shares, with a $76.56 price target.
With that being said, investors who’d rather take a more diversified approach should also give copper funds and gold funds, such as the iShares Copper and Metals Mining ETF (ICOP) and the iShares MSCI Global Gold Miners ETF (RING), a closer look.
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