Freeport-McMoRan (FCX): Assessing Valuation After Class Action Lawsuit Over Grasberg Mine Safety Allegations

Freeport-McMoRan (NYSE:FCX) is once again in the spotlight after a class action lawsuit was announced, focusing on allegations of inadequate safety practices at its Grasberg Block Cave mine in Indonesia. The legal action highlights concerns around disclosure of regulatory and reputational risks. This has prompted investors to closely assess the potential impact on the company's outlook.

See our latest analysis for Freeport-McMoRan.[1]

After hitting the headlines with the recent lawsuit, Freeport-McMoRan's share price has seen marked volatility, closing at £40.54, down 3.04% in the past day but still up 7.02% year-to-date.

While the legal challenges have shaken some confidence, the company's three-year total shareholder return of 16.33% and a 105.19% gain over five years underscore its resilience through market ups and downs.

If this legal saga has you curious about what else is driving momentum in the market, now's an ideal moment to expand your search and discover fast growing stocks with high insider ownership[2]

With shares now trading roughly 18% below analyst targets, today's volatility raises a critical question for investors: Is Freeport-McMoRan undervalued after the selloff, or has the market already factored in the risks and future growth?

Freeport-McMoRan closed at £40.54 while the most widely followed narrative places its fair value at £47.71, roughly 15% higher. This gap frames a key debate about what's really driving value at the mining giant.

Freeport's new Indonesian smelter, starting up ahead of schedule and expected to reach full capacity by year-end, will make the company a fully integrated global copper producer, lowering operating costs, capturing more downstream value, and reducing exposure to export duties. This directly supports higher future margins and cash flows.

Read the complete narrative.[3]

Curious how bold moves in smelting and integration can tip the scales on valuation?

The secret lies in expectations for growth, margins, and a profit multiple that most companies can only dream of. Want to unravel the real numbers and market tension powering this narrative? Keep reading as the details may surprise you.

Result: Fair Value of £47.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.[4]

However, near-term risks such as production setbacks at Grasberg and tighter regulation in Indonesia could quickly shift sentiment and challenge the undervaluation story.

Find out about the key risks to this Freeport-McMoRan narrative.[5]

Looking beyond fair value estimates, Freeport-McMoRan trades at a price-to-earnings ratio of 28.2 times, which is higher than both its peer average of 22.8 times and the US industry average of 24.6 times.

Although the SWS fair ratio is 30.7 times, there is little margin for error. Paying a premium could bring added risk if expectations are not met. Is the market right to price in this optimism, or is there an opportunity others are missing?

See what the numbers say about this price -- find out in our valuation breakdown.[6]

NYSE:FCX PE Ratio as at Nov 2025

If the prevailing market narratives do not align with your perspective or you would rather build your own case, revisit the numbers and see where your analysis leads.

After all, it only takes a few minutes to put together an independent view. Do it your way[7]

A great starting point for your Freeport-McMoRan research is our analysis highlighting 2 key rewards and 1 important warning sign[8] that could impact your investment decision.

Don't limit your search to just one company when there's a world of opportunities out there. The market rewards those who think strategically and stay a step ahead.

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.

Companies discussed in this article include FCX[9].

Have feedback on this article?

Concerned about the content? Get in touch[10] with us directly. Alternatively, email [email protected][11]

References

1. ^ See our latest analysis for Freeport-McMoRan. (www.simplywall.st)
2. ^ fast growing stocks with high insider ownership (simplywall.st)
3. ^ Read the complete narrative. (www.simplywall.st)
4. ^ Have a read of the narrative in full and understand what's behind the forecasts. (www.simplywall.st)
5. ^ Find out about the key risks to this Freeport-McMoRan narrative. (www.simplywall.st)
6. ^ See what the numbers say about this price -- find out in our valuation breakdown. (www.simplywall.st)
7. ^ Do it your way (support.simplywall.st)
8. ^ 2 key rewards and 1 important warning sign (finance.yahoo.com)
9. ^ FCX (finance.yahoo.com)
10. ^ Get in touch (feedback.simplywall.st)
11. ^ [email protected] (finance.yahoo.com)