Time To Buy Freeport-McMoRan Stock?

GARHAM, BAVARIA, GERMANY - 2024/07/24: In this photo illustration, Freeport-McMoRan Inc., often ... More called Freeport, is an American mining company logo seen displayed on a tablet. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)

SOPA Images/LightRocket via Getty Images

Trefis

Freeport-McMoRan [1] stock appears to be fairly valued, making it a neutral choice for investors at its current trading price of around £33. There are a few notable concerns surrounding FCX stock that justify this valuation, even though it may seem attractively priced.

Our stance is based on a comparative analysis of FCX's current valuation relative to its historical and recent financial performance. When examining Freeport-McMoRan using the key metrics of Growth, Profitability, Financial Stability, and Downturn Resilience, the company reveals a weak profile overall. For investors seeking growth with less volatility than individual stocks, the Trefis High-Quality portfolio [2] may offer a better alternative, as it has outperformed the S&P 500, delivering over 91% returns since its inception.

How Does Freeport-McMoRan's Valuation Compare to the S&P 500?

When measured by sales or profit multiples, FCX stock appears somewhat undervalued relative to the broader market. o Freeport-McMoRan has a price-to-sales (P/S) ratio of 1.9 versus 2.8 for the S&P 500.

What Has Revenue Growth Looked Like for Freeport-McMoRan?

Freeport-McMoRan's Revenues [3] have seen modest growth over recent years.

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o The company's top line has grown at an average annual rate of 3.8% over the last three years (compared to 6.2% for the S&P 500)
o Revenues have increased by 11.4% from £23 billion to £25 billion over the past 12 months (versus 5.3% growth for the S&P 500)
o However, quarterly revenues declined by 3.1% to £5.7 billion in the latest quarter, down from £5.9 billion a year earlier (while the S&P 500 grew by 4.9%)

How Does Freeport-McMoRan Score on Profitability?

The company's margins are approximately average relative to its peers in the Trefis coverage universe. o Freeport-McMoRan's Operating Income [7] over the past four quarters stood at £6.9 billion, resulting in a robust Operating Margin of 27.0% (compared to 13.1% for the S&P 500)

Is Freeport-McMoRan Financially Healthy?

The company's balance sheet appears to be in moderate shape.

o As of the most recent quarter, Freeport-McMoRan reported £9.7 billion in debt against a market cap of £48 billion (as of 4/16/2025), reflecting a moderate Debt-to-Equity Ratio of 20.2% (versus 21.5% for the S&P 500). [Note: A lower ratio is typically better]
o The company's cash and equivalents total £3.9 billion, out of £55 billion in total assets, resulting in a moderate Cash-to-Assets Ratio of 7.2% (versus 15.0% for the S&P 500)

How Does FCX Stock Perform in Market Downturns?

FCX stock has underperformed the S&P 500 during some recent market downturns. Concerned about potential market crashes and their impact on FCX? See our dashboard How Low Can Stocks Go During A Market Crash [8], which tracks stock behavior during the past six market crashes[9].

Inflation Shock (2022)

o FCX dropped 51.7% from a peak of £51.93 on March 25, 2022, to £25.09 on July 14, 2022, compared to a 25.4% drop in the S&P 500
o It fully recovered to its pre-crisis peak by April 29, 2024
o The stock then rose to a high of £54.86 on May 20, 2024, and currently trades at approximately £33

Covid Pandemic (2020)

o FCX declined 60.8% from £13.53 on January 13, 2020, to £5.31 on March 18, 2020, versus a 33.9% drop in the S&P 500
o It fully recovered to pre-pandemic levels by July 15, 2020

Global Financial Crisis (2008)

o FCX plunged 86.7% from £62.93 on May 20, 2008, to £8.40 on December 5, 2008, compared to a 56.8% drop in the S&P 500
o The stock has not yet returned to its pre-crisis peak

Bottom Line: What Does This Mean for FCX Stock?

Here's a summary of how Freeport-McMoRan performs across key metrics:

o Growth: Neutral
o Profitability: Neutral
o Financial Stability: Neutral
o Downturn Resilience: Very Weak
o Overall Assessment: Neutral These factors support our view that FCX stock is fairly priced, making it a neutral investment at the current time.

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If you're looking for higher potential returns, consider the Trefis Reinforced Value Portfolio [11], which has outperformed its all-cap benchmark index--a mix of the S&P 500, S&P MidCap, and Russell 2000--by capitalizing on bullish markets while cushioning downturns. Learn more in our RV Portfolio performance metrics [12].

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References

^ Freeport-McMoRan (www.trefis.com)
^ High-Quality portfolio (www.trefis.com)
^ Freeport-McMoRan's Revenues (www.trefis.com)
^ Trump Issues Huge Fed Challenge--Sparking Stock Market Plunge As Gold And Bitcoin Price Soar (www.forbes.com)
^ New Gmail Warning -- Do Not Open This Email From Google (www.forbes.com)
^ WWE WrestleMania 41 Results, Winners And Grades On Night 2 (www.forbes.com)
^ Freeport-McMoRan's Operating Income (www.trefis.com)
^ How Low Can Stocks Go During A Market Crash (www.trefis.com)
^ market crashes (www.trefis.com)
^ Preserve & Grow Wealth With Risk-Focused Quality Portfolios (www.trefis.com)
^ Reinforced Value Portfolio (www.trefis.com)
^ RV Portfolio performance metrics (www.trefis.com)
^ Invest with Trefis (www.trefis.com)