Results: Freeport-McMoRan Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Freeport-McMoRan Inc. (NYSE:FCX) just released its latest first-quarter results and things are looking bullish. It was a decent earnings report, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 11% higher than the analysts had forecast, at US$6.3b, while EPS of US$0.32 beat analyst models by 16%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Freeport-McMoRan

Following the latest results, Freeport-McMoRan's 15 analysts are now forecasting revenues of US$25.1b in 2024. This would be a credible 5.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 37% to US$1.58. Before this earnings report, the analysts had been forecasting revenues of US$24.3b and earnings per share (EPS) of US$1.63 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a credible to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.

The consensus price target was unchanged at US$50.87, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Freeport-McMoRan, with the most bullish analyst valuing it at US$60.00 and the most bearish at US$39.20 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Freeport-McMoRan's past performance and to peers in the same industry. We would highlight that Freeport-McMoRan's revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2024 being well below the historical 12% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.8% per year. Even after the forecast slowdown in growth, it seems obvious that Freeport-McMoRan is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Freeport-McMoRan. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$50.87, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Freeport-McMoRan analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Freeport-McMoRan you should be aware of.

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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.