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FCX

Freeport-McMoRan NYSE:FCX Stock Report

Last Price

US$30.25

Market Cap

US$43.2b

7D

-3.7%

1Y

-10.7%

Updated

17 Aug, 2022

Data

Company Financials +
FCX fundamental analysis
Snowflake Score
Valuation4/6
Future Growth0/6
Past Performance5/6
Financial Health5/6
Dividends3/6

FCX Stock Overview

Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia.

Freeport-McMoRan Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Freeport-McMoRan
Historical stock prices
Current Share PriceUS$30.25
52 Week HighUS$51.99
52 Week LowUS$24.80
Beta2.01
1 Month Change10.32%
3 Month Change-17.62%
1 Year Change-10.71%
3 Year Change230.96%
5 Year Change97.84%
Change since IPO146.94%

Recent News & Updates

Aug 11

Freeport-McMoRan And Copper: Already In The Recession Phase

We do not expect the copper price to fall below $6500/ton with the onset of recession. The main reason is the current raw material price (~$7300/ton) removing ~30% of the potential copper supply from the market. We expect the current decline of copper price to catch up quickly by the end of 2023 due to future shortage, as it happened between 2008 and 2010. It is still too early to buy FCX, and the ideal entry point shall appear around Q4 2022. Investment thesis The cost of industrial metals, including copper, corrected in the last quarter by an average of 30% compared to its max value. The main reason for the decline was fear of impending recession, QT and Fed rate growth (as DXY increases, raw material prices tend to fall). Since the market includes commonly known factors in the asset price prior to the actual occurrence of the event, we believe that all negative factors are already included in the price. But it is still too early to buy Freeport-McMoRan Inc. (FCX), and the ideal entry point should appear around Q4 2022. Copper is an important indicator of the economy Copper price is the leading indicator of the global economy. According to MacroMicro, the global economy typically has been slowing/accelerating with a time lag of several months following the decline in copper prices. We believe that the current situation is the same, and we have yet to observe a major production decline (Q4 2022-Q1 2023). MacroMicro In turn, the copper price is keeping to China's PMI almost in real-time. Now there is a slight divergence from the index, and we will probably see a "rebound" in the commodity price. MacroMicro We do not expect the copper price to fall below $6500/ton with the onset of recession. The main reason is the current raw material price (~$7300/ton) removing ~30% of the potential copper supply from the market due to unprofitable projects, according to Citi, and "green shift" of the agenda. However, the market does not assume this and suggests the balance of supply and demand in 2023. CAPEX for copper mining companies and cost with prices below $6500/ton has already become "uncomfortable" for margin. Citi Green agenda shall generate shortage According to S&P Global, copper demand shall increase by 24% by 2025 due to the "green shift," leading to a nearly twofold increase of copper consumption by 2050. S&P Global So far, the bulk of copper consumption has originated from China due to high concentration of production capacity and urgent "green" agenda. The trend is likely to spread into less developed regions, where the issue of building infrastructure as well as "green shift" shall arise. S&P Global In the long and medium term, commodity shortage is expected to contribute to a new round of price growth. S&P Global We expect the current decline in copper price to catch up quickly by the end of 2023 due to its future deficit, as it happened between 2008 and 2010. However, in the short term, we have revised our copper price expectation downwards from $4.68/lb to $4.08/lb due to the global recession starting between Q4 2022 and Q1 2023. Invest Heroes, Investing.com We believe it is too early to bet on copper mining companies now, due to release of negative data on China and the U.S. as for the end of Q3 2022, which may consolidate the price around 6500-7000/ton. However, as the global economy recovers from crisis, demand for raw materials shall be renewed, pushing the copper price and quotes of the companies back to high level. Valuation Due to declining copper price, we have revised our 2022 EBITDA forecast downwards from $13411 mln (+25% y/y) to $10165 mln (-5% y/y), and from $14208 mln (+6% y/y) to $13758 mln (+35% y/y) in 2023 due to the gold price increase (from $1784/oz to $1916/oz) and higher extraction rate of gold from ore with ~1 gram of the gold content per ton (77% vs. previous valuation - 75%). Invest Heroes In the long term, copper shall not be subject to a strong price correction due to impressive fundamental support provided by the global shortage of copper. We expect copper prices to remain around 10000$/t for a long time after 2023, while in the short term we expect a price correction due to the upcoming recession. Our target Freeport stock price is $40. The upside - 53%. However, it is too early to buy Freeport, the best entry point is likely to arise at the time of negative data release in 4Q 2022.

Jul 31

Freeport-McMoRan: Don't Fear, July's Bottom Is Robust (Technical Analysis)

Freeport-McMoRan reported a Q2 card that showed the effects of the near-term volatility in copper pricing. However, FCX maintained its July lows and continued its robust recovery. We believe that the market has priced in a recession since FCX's topping signals in March 2022. Therefore, the recent economic data suggesting a technical recession didn't batter Freeport. We believe that the long-term underlying trends underpinning FCX and copper remain intact. As a result, we are confident its July lows should hold in the medium-term. Therefore, we rate FCX stock as a Buy. However, it's near-term overbought. So, investors can consider waiting for a retracement first. Thesis Freeport-McMoRan Inc. (FCX) released its Q2 earnings card amid a steep decline in copper futures (HG1:COM) since March 2022. However, we observed that copper futures staged a dramatic rebound that revalidated its early July bear trap (indicating the market denied further selling downside). As a result, we believe that copper futures have likely bottomed out in the medium-term. Therefore, it also bodes well for FCX, as we also noticed a bear trap. Notwithstanding, FCX and copper futures are overbought in the near term, given their sharp recovery in July. However, we remain confident that the medium-term recovery remains intact, even though there could be short-term volatility. As a result, we rate FCX as a Buy. However, investors can consider a retracement before adding exposure, given its short-term technically overbought levels. Recession Coming? The Market Is Forward-Looking FCX price chart (monthly) (TradingView) Given the market's forward-discounting mechanism, we believe it has already priced in a recession since March, as seen in FCX's long-term chart. The market set up a double top bull trap (indicating the market denied further buying upside decisively) in March 2022, after an initial bull trap in May 2021. Similar price action is also observed in copper futures (black line overlay), necessitating investors to pay close attention to its underlying price trends. Therefore, the market used March's bull trap to stage the final run-up in bullish momentum from buyers before digesting it significantly. As a result, although the US reported its second consecutive quarter of QoQ annualized quarterly GDP decline (suggesting a technical recession), FCX and copper futures held their July lows and maintained their recoveries. The recessionary theme was also highlighted by management in its recent earnings call. However, it remains confident that the futures pricing does not reflect the realities in the physical copper market. CEO Richard Adkerson accentuated (edited): There is a disconnect between today's physical market and the current copper price. For us, it feels about the same as it did when copper was at $4.50. Our customers continue to report strong business. Copper inventories are at historical lows. There has been, to date, no significant impact on physical demand. But, the outlook is uncertain. Analysts are calling in a range from a near-term major recession to longer-term stagflation. Whatever happens, the long-term outlook for copper is bright. FCX is well positioned to be a major beneficiary. This world is becoming increasingly electrified with the demand for copper growing as the world acts to reduce carbon emissions with electric vehicles and alternative power generation. (Freeport FQ2'22 earnings call) Therefore, the market reacted differently (based on price action) from what the recent economic data suggested. Why? Because we believe the market has already priced in the weakness in FCX and copper futures. Note that FCX fell more than 50% from its March 2022 highs to its July lows. We consider the damage significant enough to resolve the potency of its bull trap. Hence, investors should focus on its most recent price structure, which is FCX's July bottom. Can Freeport-McMoRan Sustain Its Current Valuation? Stock FCX Current market cap $44.61B Hurdle rate [CAGR] 7% Projection through CQ4'26 Required FCF yield in CQ4'26 13% Assumed TTM FCF margin in CQ4'26 26.5% Implied TTM revenue by CQ4'26 $29.52B

Jul 21

Freeport-McMoRan Non-GAAP EPS of $0.58 misses by $0.08, revenue of $5.42B misses by $720M

Freeport-McMoRan press release (NYSE:FCX): Q2 Non-GAAP EPS of $0.58 misses by $0.08. Revenue of $5.42B (-5.7% Y/Y) misses by $720M. Shares -1.3% PM. Consolidated sales volumes for FY2022 are expected to approximate 4.2 B pounds of copper, 1.7M ounces of gold and 80M pounds of molybdenum, including 1B pounds of copper, 400K ounces of gold and 21M pounds of molybdenum in third-quarter 2022. Capital expenditures for the year are expected to approximate $4.5B.

Shareholder Returns

FCXUS Metals and MiningUS Market
7D-3.7%-1.8%1.1%
1Y-10.7%-9.7%-9.0%

Return vs Industry: FCX underperformed the US Metals and Mining industry which returned -8.2% over the past year.

Return vs Market: FCX underperformed the US Market which returned -8.9% over the past year.

Price Volatility

Is FCX's price volatile compared to industry and market?
FCX volatility
FCX Average Weekly Movement8.0%
Metals and Mining Industry Average Movement9.3%
Market Average Movement7.6%
10% most volatile stocks in US Market17.0%
10% least volatile stocks in US Market3.1%

Stable Share Price: FCX is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: FCX's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198724,700Richard Adkersonhttps://fcx.com

Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia. The company primarily explores for copper, gold, molybdenum, silver, and other metals, as well as oil and gas. Its assets include the Grasberg minerals district in Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami in Arizona; Tyrone and Chino in New Mexico; and Henderson and Climax in Colorado, North America, as well as Cerro Verde in Peru and El Abra in Chile.

Freeport-McMoRan Fundamentals Summary

How do Freeport-McMoRan's earnings and revenue compare to its market cap?
FCX fundamental statistics
Market CapUS$43.24b
Earnings (TTM)US$4.86b
Revenue (TTM)US$24.27b

8.9x

P/E Ratio

1.8x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
FCX income statement (TTM)
RevenueUS$24.27b
Cost of RevenueUS$12.42b
Gross ProfitUS$11.85b
Other ExpensesUS$6.98b
EarningsUS$4.86b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.40
Gross Margin48.83%
Net Profit Margin20.04%
Debt/Equity Ratio46.1%

How did FCX perform over the long term?

See historical performance and comparison

Dividends

2.0%

Current Dividend Yield

16%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is FCX undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FCX?

Other financial metrics that can be useful for relative valuation.

FCX key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.2x
Enterprise Value/EBITDA4.7x
PEG Ratio-1.2x

Price to Earnings Ratio vs Peers

How does FCX's PE Ratio compare to its peers?

FCX PE Ratio vs Peers
The above table shows the PE ratio for FCX vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average24.7x
SCCO Southern Copper
12.8x6.5%US$37.2b
NUE Nucor
4.1x-46.4%US$36.8b
NEM Newmont
48x5.0%US$35.6b
AEM Agnico Eagle Mines
33.9x11.3%US$19.9b
FCX Freeport-McMoRan
8.9x-7.3%US$43.2b

Price-To-Earnings vs Peers: FCX is good value based on its Price-To-Earnings Ratio (8.9x) compared to the peer average (24.7x).


Price to Earnings Ratio vs Industry

How does FCX's PE Ratio compare vs other companies in the US Metals and Mining Industry?

Price-To-Earnings vs Industry: FCX is expensive based on its Price-To-Earnings Ratio (8.9x) compared to the US Metals and Mining industry average (8.3x)


Price to Earnings Ratio vs Fair Ratio

What is FCX's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FCX PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio8.9x
Fair PE Ratio14.1x

Price-To-Earnings vs Fair Ratio: FCX is good value based on its Price-To-Earnings Ratio (8.9x) compared to the estimated Fair Price-To-Earnings Ratio (14.1x).


Share Price vs Fair Value

What is the Fair Price of FCX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FCX ($30.25) is trading below our estimate of fair value ($128.68)

Significantly Below Fair Value: FCX is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is Freeport-McMoRan forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-7.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FCX's earnings are forecast to decline over the next 3 years (-7.3% per year).

Earnings vs Market: FCX's earnings are forecast to decline over the next 3 years (-7.3% per year).

High Growth Earnings: FCX's earnings are forecast to decline over the next 3 years.

Revenue vs Market: FCX's revenue (2.8% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: FCX's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FCX's Return on Equity is forecast to be low in 3 years time (13.5%).


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Past Performance

How has Freeport-McMoRan performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


20.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FCX has high quality earnings.

Growing Profit Margin: FCX's current net profit margins (20%) are higher than last year (14.9%).


Past Earnings Growth Analysis

Earnings Trend: FCX has become profitable over the past 5 years, growing earnings by 20.7% per year.

Accelerating Growth: FCX's earnings growth over the past year (71.8%) exceeds its 5-year average (20.7% per year).

Earnings vs Industry: FCX earnings growth over the past year (71.8%) underperformed the Metals and Mining industry 93%.


Return on Equity

High ROE: FCX's Return on Equity (25%) is considered high.


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Financial Health

How is Freeport-McMoRan's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: FCX's short term assets ($16.2B) exceed its short term liabilities ($5.9B).

Long Term Liabilities: FCX's short term assets ($16.2B) do not cover its long term liabilities ($20.1B).


Debt to Equity History and Analysis

Debt Level: FCX's net debt to equity ratio (6.7%) is considered satisfactory.

Reducing Debt: FCX's debt to equity ratio has reduced from 153.5% to 46.1% over the past 5 years.

Debt Coverage: FCX's debt is well covered by operating cash flow (68.1%).

Interest Coverage: FCX's interest payments on its debt are well covered by EBIT (16.7x coverage).


Balance Sheet


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Dividend

What is Freeport-McMoRan current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.98%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: FCX's dividend (1.98%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: FCX's dividend (1.98%) is low compared to the top 25% of dividend payers in the US market (3.95%).


Stability and Growth of Payments

Stable Dividend: FCX's dividend payments have been volatile in the past 10 years.

Growing Dividend: FCX's dividend payments have fallen over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (15.7%), FCX's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (18.4%), FCX's dividend payments are well covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average management tenure


CEO

Richard Adkerson (75 yo)

18.67yrs

Tenure

US$19,111,894

Compensation

Mr. Richard C. Adkerson serves as the Chairman of Freeport-McMoRan Inc. since February 2021 and also serves as its Chief Executive Officer since December 2003. He has been a Director of Freeport-McMoRan In...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD19.11M) is above average for companies of similar size in the US market ($USD12.87M).

Compensation vs Earnings: Richard's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: FCX's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Members

Experienced Board: FCX's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FCX insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Freeport-McMoRan Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Freeport-McMoRan Inc.
  • Ticker: FCX
  • Exchange: NYSE
  • Founded: 1987
  • Industry: Copper
  • Sector: Materials
  • Implied Market Cap: US$43.235b
  • Shares outstanding: 1.43b
  • Website: https://fcx.com

Number of Employees


Location

  • Freeport-McMoRan Inc.
  • 333 North Central Avenue
  • Phoenix
  • Arizona
  • 85004-2189
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/17 00:00
End of Day Share Price2022/08/17 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.