Shares of Freeport-McMoRan fell more than 8 percent on Tuesday after the company announced it was selling more assets, a deal that some analysts said was "cheap."
On Monday, Freeport said it will sell some of its oil and gas assets in the Deepwater Gulf of Mexico to Anadarko Petroleum for $2 billion in cash consideration. CEO Richard Adkerson said that this deal reflects the company's "commitment to debt reduction" and its shift to focus on its copper business.
In a research report, Deutsche Bank said the transaction is of "low value."
The firm had valued the related properties at $2.9 billion for its net asset value. It maintained its "hold" rating on the stock, but lowered the price target to $12 from $12.50.
Deutsche said that while the deal will "assist Freeport's balance sheet repair process" and simplify the business to focus on copper, it "is also reducing portfolio optionality."
Even with Tuesday's losses, the stock has gained nearly 50 percent so far this year. It is, however, still down nearly 11 percent in the past year.
Disclosure: Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from Freeport within the past year. The company has been a client of Deutsche Bank Securities within the past year, during which time it received non-investment banking securities-related services.