Has Freeport McMoRan’s 25% 2025 Rally Already Priced In Copper Growth Prospects?

• Wondering if Freeport McMoRan at around $47 is still a smart way to play copper and gold, or if most of the upside is already priced in? You are not alone; this stock attracts a lot of valuation focused investors.
• Over the last week the share price is up 4.8%, roughly 13.3% over the past month, and it has climbed 25.1% year to date, with longer term gains of 15.7% over 1 year, 28.9% over 3 years, and 105.5% over 5 years. These returns naturally raise questions about what is already baked into today’s price.
• Recent moves have been driven largely by shifting expectations for global copper demand, as investors weigh long term electrification and energy transition themes against short term macro uncertainty. At the same time, sentiment around commodities has been swinging with changing interest rate expectations and geopolitical headlines, which can quickly alter how markets value cyclical miners like Freeport McMoRan.
• Even after this run, Freeport McMoRan only scores a 2 out of 6 on our undervaluation checks. In the next sections we will unpack what the main valuation models say, and then finish with a more holistic way to think about what this business might really be worth.

Freeport-McMoRan scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Freeport-McMoRan Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today in dollar terms.

For Freeport McMoRan, the latest twelve month free cash flow is about $1.4 billion. Analysts and extrapolations used in our 2 Stage Free Cash Flow to Equity model see this rising significantly, with projected free cash flow around $11.5 billion by 2035, based on a mix of analyst forecasts out to 2029 and gradually slowing growth assumptions thereafter.

When all those future cash flows are discounted back, the model suggests an intrinsic value of roughly $110.21 per share. Versus a market price around $47, the DCF implies the shares are about 57.0% undervalued, leaving a wide margin between modeled value and what the market is currently willing to pay.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Freeport-McMoRan is undervalued by 57.0%. Track this in your watchlist or portfolio, or discover 907 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Freeport-McMoRan.

Approach 2: Freeport-McMoRan Price vs Earnings

For a profitable company like Freeport McMoRan, the price to earnings, or PE, ratio is a useful way to gauge what investors are willing to pay for each dollar of current earnings. The higher the expected growth and the lower the perceived risk, the more investors are usually prepared to pay. This translates into a higher, but still justifiable, PE ratio.

Right now, Freeport McMoRan trades on a PE of about 32.95x, which is noticeably richer than both the Metals and Mining industry average of roughly 22.94x and a peer group average of around 22.13x. To move beyond simple comparisons, Simply Wall St uses a proprietary Fair Ratio, which estimates what a reasonable PE should be once factors like earnings growth, profitability, industry, market cap and specific risks are all taken into account.

For Freeport McMoRan, this Fair Ratio is 28.09x, which sits below the current market multiple. That gap suggests the stock is pricing in more optimism than the fundamentals and risk profile fully support, pointing to some valuation stretch rather than a clear bargain.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1448 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Freeport-McMoRan Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce Narratives, a simple framework on Simply Wall St’s Community page that lets you attach your own story about Freeport McMoRan’s future to a set of numbers. It links what you believe about its copper demand, margins and risks to a concrete forecast for revenue, earnings and ultimately a fair value estimate that you can compare directly to today’s share price to decide whether to buy, hold or sell. The whole view updates dynamically as new news or earnings drop. For example, a bullish investor might build a Narrative around tight copper markets, rising U.S. policy support and improving margins that justifies a fair value up near the higher analyst targets around $57. A more cautious investor could create a Narrative that leans into Grasberg disruption, regulatory pressure and weaker Chinese demand that pulls fair value closer to the low end near $27, showing you in one place how different perspectives on the same company produce very different numbers.

Do you think there's more to the story for Freeport-McMoRan? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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