NYSE:FCX

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 44.3% below its fair value

Earnings are forecast to grow 48% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 1.51% is not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

+ 1 more risk


Snowflake Analysis

Reasonable growth potential and slightly overvalued.


Similar Companies

TOTAL

ENXTPA:FP

Share Price & News

How has Freeport-McMoRan's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FCX's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.4%

FCX

1.7%

US Metals and Mining

1.7%

US Market


1 Year Return

2.3%

FCX

12.6%

US Metals and Mining

23.2%

US Market

Return vs Industry: FCX underperformed the US Metals and Mining industry which returned 17.5% over the past year.

Return vs Market: FCX underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

FCXIndustryMarket
7 Day-0.4%1.7%1.7%
30 Day-1.0%0.08%4.2%
90 Day34.1%13.3%11.9%
1 Year4.1%2.3%15.9%12.6%25.8%23.2%
3 Year-14.5%-17.2%4.2%-1.4%52.8%42.9%
5 Year-30.0%-33.2%36.0%25.5%75.2%55.8%

Price Volatility Vs. Market

How volatile is Freeport-McMoRan's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Freeport-McMoRan undervalued compared to its fair value and its price relative to the market?

45.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FCX ($13.21) is trading below our estimate of fair value ($23.7)

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


Price To Earnings Ratio

PE vs Industry: FCX is poor value based on its PE Ratio (83.7x) compared to the Metals and Mining industry average (11.4x).

PE vs Market: FCX is poor value based on its PE Ratio (83.7x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: FCX is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: FCX is overvalued based on its PB Ratio (2x) compared to the US Metals and Mining industry average (1.6x).


Next Steps

Future Growth

How is Freeport-McMoRan forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

47.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FCX's forecast earnings growth (48% per year) is above the savings rate (1.7%).

Earnings vs Market: FCX's earnings (48% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FCX's revenue (8.4% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: FCX's revenue (8.4% 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 (19.7%).


Next Steps

Past Performance

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

47.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FCX has a large one-off loss of $333.0M impacting its September 30 2019 financial results.

Growing Profit Margin: FCX's current net profit margins (1.6%) are lower than last year (15.8%).


Past Earnings Growth Analysis

Earnings Trend: FCX has become profitable over the past 5 years, growing earnings by 47% per year.

Accelerating Growth: FCX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FCX had negative earnings growth (-92.7%) over the past year, making it difficult to compare to the Metals and Mining industry average (-7.6%).


Return on Equity

High ROE: FCX's Return on Equity (0.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Freeport-McMoRan's financial position?


Financial Position Analysis

Short Term Liabilities: FCX's short term assets ($8.3B) exceed its short term liabilities ($3.4B).

Long Term Liabilities: FCX's short term assets ($8.3B) do not cover its long term liabilities ($20.0B).


Debt to Equity History and Analysis

Debt Level: FCX's debt to equity ratio (56.5%) is considered high.

Reducing Debt: FCX's debt to equity ratio has reduced from 73.9% to 56.5% over the past 5 years.

Debt Coverage: FCX's debt is not well covered by operating cash flow (12.6%).

Interest Coverage: FCX's interest payments on its debt are not well covered by EBIT (1.1x coverage).


Balance Sheet

Inventory Level: FCX has a high level of physical assets or inventory.

Debt Coverage by Assets: FCX's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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

1.56%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.4%markettop25%3.6%industryaverage2.5%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: FCX's dividend (1.51%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: FCX's dividend (1.51%) is low compared to the top 25% of dividend payers in the US market (3.66%).


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.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (126.7%), FCX's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FCX's dividends in 3 years are forecast to be thoroughly covered by earnings (13.3% payout ratio).


Next Steps

Management

What is the CEO of Freeport-McMoRan's salary, the management and board of directors tenure and is there insider trading?

13.0yrs

Average management tenure


CEO

Richard Adkerson (72yo)

16.1yrs

Tenure

US$16,424,035

Compensation

Mr. Richard C. Adkerson has been the President of Freeport-Mcmoran Oil & Gas LLC since January 1, 2008 and its Chief Executive Officer since December 10, 2003. Mr. Adkerson serves as an Executive Vice Pres ...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD16.42M) is above average for companies of similar size in the US market ($USD10.76M).

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


Management Age and Tenure

13.0yrs

Average Tenure

63yo

Average Age

Experienced Management: FCX's management team is seasoned and experienced (13 years average tenure).


Board Age and Tenure

6.1yrs

Average Tenure

73.5yo

Average Age

Experienced Board: FCX's board of directors are considered experienced (6.1 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$524,34010 Jun 19
Kathleen Quirk
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares50,000
Max PriceUS$10.49
BuyUS$1,744,08006 Jun 19
Richard Adkerson
EntityIndividual
Role
Chief Executive Officer
Vice Chairman
Shares172,000
Max PriceUS$10.14
SellUS$85,95513 Feb 19
C. Whitmire
EntityIndividual
Shares7,425
Max PriceUS$11.58

Ownership Breakdown

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


Management Team

  • Kathleen Quirk (55yo)

    Executive VP & CFO

    • Tenure: 16.1yrs
    • Compensation: US$6.78m
  • Richard Adkerson (72yo)

    Vice Chairman

    • Tenure: 16.1yrs
    • Compensation: US$16.42m
  • W. King (69yo)

    Senior Vice President of International Relations & Federal Government Affairs

    • Red Conger (63yo)

      President & COO of Americas

      • Tenure: 13yrs
      • Compensation: US$4.74m
    • Mark Johnson (60yo)

      President & COO of Freeport-McMoRan Indonesia

      • Tenure: 4.5yrs
      • Compensation: US$4.18m
    • Dean Falgoust (61yo)

      President of FMS & VP of FCX

      • Javier Targhetta

        Senior Vice President of FCX - Concentrates

        • Lynne Cooney

          VP & Assistant to the Chairman

          • Stephen Higgins

            Senior VP & Chief Administrative Officer

            • L. McMillan (72yo)

              Senior VP & General Counsel

              • Tenure: 12.3yrs

            Board Members

            • Dustan McCoy (69yo)

              Independent Director

              • Tenure: 13yrs
              • Compensation: US$277.50k
            • James Moffett (81yo)

              Chairman Emeritus

              • Tenure: 4.1yrs
              • Compensation: US$24.82m
            • Richard Adkerson (72yo)

              Vice Chairman

              • Tenure: 16.1yrs
              • Compensation: US$16.42m
            • J. Johnston (86yo)

              Member of Advisory Board

              • Compensation: US$779.79k
            • Henry Kissinger (95yo)

              Director Emeritus

              • Jerry Ford (75yo)

                Non-Executive Chairman of the Board

                • Tenure: 4.1yrs
                • Compensation: US$327.03k
              • J. Roy (82yo)

                Member of Advisory Board

                • Compensation: US$555.93k
              • Lydia Kennard (64yo)

                Independent Director

                • Tenure: 6.1yrs
                • Compensation: US$264.54k
              • John Stephens (60yo)

                Director

                • Tenure: 0.3yrs
              • Frances Fragos Townsend (57yo)

                Independent Director

                • Tenure: 7yrs
                • Compensation: US$269.55k

              Company Information

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


              Key Information

              • Name: Freeport-McMoRan Inc.
              • Ticker: FCX
              • Exchange: NYSE
              • Founded: 1987
              • Industry: Copper
              • Sector: Materials
              • Market Cap: US$18.644b
              • Shares outstanding: 1.45b
              • Website: https://www.fcx.com

              Number of Employees


              Location

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

              Listings

              TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
              FCXNYSE (New York Stock Exchange)YesClass B Common StockUSUSDJul 1995
              FPMBETLX (Eurotlx)YesClass B Common StockITEURJul 1995
              FCX *BMV (Bolsa Mexicana de Valores)YesClass B Common StockMXMXNJul 1995
              FPMBXTRA (XETRA Trading Platform)YesClass B Common StockDEEURJul 1995
              FCXWBAG (Wiener Boerse AG)YesClass B Common StockATEURJul 1995
              FPMBDB (Deutsche Boerse AG)YesClass B Common StockDEEURJul 1995
              FCXSNSE (Santiago Stock Exchange)YesClass B Common StockCLUSDJul 1995
              0R2OLSE (London Stock Exchange)YesClass B Common StockGBUSDJul 1995
              FCXBVL (Bolsa de Valores de Lima)YesClass B Common StockPEUSDJul 1995
              FCXBASE (Buenos Aires Stock Exchange)CEDEAR EACH REP 1 ORD SHSARARSApr 2011
              FCXO34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COM SHBRBRLJan 2012

              Biography

              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. It also operates a portfolio of oil and gas assets comprising oil and natural gas production onshore in South Louisiana; and oil production offshore California. As of December 31, 2018, the company’s estimated consolidated recoverable proven and probable mineral reserves totaled 119.6 billion pounds of copper, 30.8 million ounces of gold, and 3.78 billion pounds of molybdenum, as well as estimated proved developed oil and natural gas reserves totaled 7.2 million barrels of oil equivalents. The company was formerly known as Freeport-McMoRan Copper & Gold Inc. and changed its name to Freeport-McMoRan Inc. in July 2014. Freeport-McMoRan Inc. was founded in 1987 and is headquartered in Phoenix, Arizona. 


              Company Analysis and Financial Data Status

              All financial data provided by Standard & Poor's Capital IQ.
              DataLast Updated (UTC time)
              Company Analysis2020/01/17 01:31
              End of Day Share Price2020/01/16 00:00
              Earnings2019/09/30
              Annual Earnings2018/12/31


              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.