FCX Freeport-McMoRan
World-class copper assets, but cyclical earnings and a heroic implied growth rate deny a durable bargain.
The business
Freeport-McMoRan mines and sells copper, gold, and molybdenum, with economics driven chiefly by copper prices, ore grades, and production costs. Its irreplaceable reserves provide longevity, but commodity pricing and geopolitical exposure make decade-ahead owner earnings difficult to predict.
Quality gate · 78/100
Moat & management
| Moat | narrow moat |
| Source | cost advantage |
| Trajectory | stable |
| Management | adequate |
Grasberg and Freeport's large, long-lived copper assets are exceptionally difficult and expensive to replicate. The advantage is constrained by commodity pricing, capital intensity, reserve depletion, and dependence on Indonesian government cooperation.
Management has repaired the balance sheet and generally avoided meaningful dilution, but heavy development spending and historically cyclical capital allocation warrant restraint. Returns remain strongly influenced by copper prices rather than managerial excellence alone.
Owner-earnings inputs
| Owner earnings (TTM) | 1.75B |
| Owner-earnings yield | 2.1% |
| Free-cash-flow yield | 2.1% |
| Growth used (normalized) | 6.0% |
| Market-implied growth (reverse DCF) | 25.0% |
| Terminal growth | 3.0% |
| Discount rate (hurdle) | 10.7% |
Projected owner earnings
| Yr | Owner earnings | Growth | PV |
|---|---|---|---|
| 1 | 1.86B | 6.0% | 1.68B |
| 2 | 1.96B | 5.7% | 1.60B |
| 3 | 2.07B | 5.3% | 1.52B |
| 4 | 2.17B | 5.0% | 1.44B |
| 5 | 2.27B | 4.7% | 1.37B |
| 6 | 2.37B | 4.3% | 1.29B |
| 7 | 2.46B | 4.0% | 1.21B |
| 8 | 2.56B | 3.7% | 1.13B |
| 9 | 2.64B | 3.3% | 1.06B |
| 10 | 2.72B | 3.0% | 983.48M |
Key risks
- A sustained decline in copper prices could sharply reduce owner earnings
- Indonesian regulatory, ownership, tax, or operating intervention at Grasberg
- Cost inflation, declining ore grades, and capital-intensive reserve replacement
Catalysts
- Long-term copper demand from electrification and constrained global mine supply
- Higher production and cash generation from underground operations and expansion projects
Recent news
score · 8 articles
- Freeport-McMoRan (FCX) Declines More Than Market: Some Information for Investors
- Freeport-McMoRan (FCX) Earnings Expected to Grow: Should You Buy?
- Morgan Stanley Lifts PT on Freeport-McMoRan (FCX) – Here’s Why
- Natural Gas Stocks: Short-Term Pain, Long-Term Opportunity?
- Company News for July 13, 2026
- Freeport-McMoRan (FCX) Surpasses Market Returns: Some Facts Worth Knowing
- Natural-Gas Prices Sink as Texas LNG Terminal Closes for Maintenance
- Make Your FCX Shares Pay You 15% While You Hold Them
⚠ maintenance capex ≈ min(capex, D&A), capped at FCF · Price pays for ~25%/yr owner-earnings growth over 10y (reverse DCF); model credits 6%. · Rich vs our conservative value, but a quality business is not a short — stance is WAIT for a better price, not sell.