Core Viewpoint - Freeport-McMoRan's stock has declined 37% from its all-time high despite copper prices nearing an all-time high, indicating a potential investment opportunity amid market downturns [1] Group 1: Reasons for Stock Decline - The stock's performance is disconnected from copper prices due to two main factors that appear unjustified [2] - A fire at a newly opened smelter in Indonesia has led to operational challenges, including a potential export ban on copper concentrate starting January 1, 2025, requiring permits for exports [3] - The Indonesian government has issued a six-month permit for Freeport to export concentrates while repairs are made to the smelter [4] - Concerns over the recent rise in U.S. copper prices being driven by speculative buying ahead of potential tariffs may have contributed to the stock's decline [5] Group 2: Company Positioning - Freeport-McMoRan is strategically positioned to benefit from U.S. production initiatives and tariff conflicts, with plans for brownfield expansions in Arizona expected to add 650 million pounds of copper annually [6][7] - The company's U.S.-focused leaching initiative aims to recover 800 million pounds of copper annually by 2030, contributing to a projected total production of 4 billion pounds in 2025 [8] Group 3: Long-term Demand for Copper - Copper is essential for various modern economic trends, including electric vehicles, renewable energy, and the Internet of Things, all of which are part of the "electrification of everything" megatrend [9][10] - While individual demand drivers may experience temporary weaknesses, the overall demand for copper is expected to remain strong [11] Group 4: Investment Opportunity - The combination of rising copper prices, favorable volume growth outlook, and long-term demand trends makes Freeport-McMoRan an attractive stock to consider for investment [12] - The current disconnect between the falling stock price and rising copper prices presents a potential opportunity for investors [13]

Core Viewpoint - The price of copper is nearing an all-time high, presenting a strong investment opportunity in Freeport-McMoRan, a major copper and gold miner, particularly due to its U.S. production and potential benefits from market dynamics [1]. Group 1: Copper Price Dynamics - The Chicago Mercantile Exchange (CME) copper price is up 27% year to date, currently around $5.10 per pound, while the London Metal Exchange (LME) price is up almost 14% year to date [2]. - Concerns over potential tariffs on imported copper by the Trump administration have led to increased buying in the U.S. market [3][4]. Group 2: Freeport-McMoRan's Competitive Position - Freeport-McMoRan produces copper primarily in the U.S., which shields it from retaliatory tariffs and allows it to benefit from rising CME prices [5]. - The company’s production volumes for 2024 are projected at 1.246 billion pounds in North America, 1.168 billion pounds in South America, and 1.8 billion pounds in Indonesia [6]. - The unit net cash cost of production is $3.04 per pound in the U.S., compared to $2.36 per pound in South America and a net cash credit of $0.08 per pound in Indonesia, indicating higher leverage to U.S. price increases [6][7]. Group 3: Production Expansion Potential - Freeport-McMoRan has plans to increase U.S. copper production, with a low-cost leaching initiative expected to produce 300 million to 400 million pounds by 2026, up from 214 million pounds in 2024, aiming for 800 million pounds by 2030 [10]. - The company is exploring brownfield expansions in Lone Star, Arizona, which could double current production, and is considering a project in Bagdad, Arizona, that could add 200 million to 250 million pounds by 2029 [11]. Group 4: Financial Outlook - With copper prices at $5 per pound, Freeport-McMoRan is projected to generate $15 billion in EBITDA in 2026 and 2027, suggesting the company is undervalued with a current market cap of $58.1 billion [12].

Core Viewpoint - J.P. Morgan analyst Bill Peterson upgraded Freeport-McMoRan, Inc. to an Overweight rating, raising the price forecast to $52 from $48, driven by tariff-related factors and long-term supply constraints supporting premium pricing for U.S. operations [1] Group 1: Tariff and Pricing Impact - Since the announcement regarding the assessment of U.S. copper imports as a national security risk, COMEX copper has maintained an average premium of approximately 10% over LME prices [2] - The ongoing review is expected to conclude by November 22, which may lead to protective measures for U.S. copper imports [3] Group 2: Financial Contributions and Positioning - Freeport-McMoRan's U.S. operations contribute around 10% of its operating profit for FY24 and 20% of post-tax earnings due to net operating loss benefits [3] - The company is well-positioned compared to peers to capitalize on near-term upside opportunities, even if protective policies do not materialize [4] Group 3: Long-term Outlook - The Commodities team projects widening supply deficits this year and into the next decade, reinforcing a favorable long-term outlook for copper pricing [5] - The expected resumption of concentrate exports and record gold prices are anticipated to boost by-product credits at the Grasberg mine [4]

Company Performance - Freeport-McMoRan (FCX) closed at $39.51, reflecting a +1.7% change from the previous session, outperforming the S&P 500's gain of 0.64% [1] - The stock has decreased by 1.57% over the past month, which is better than the Basic Materials sector's loss of 1.92% and the S&P 500's loss of 7.69% [1] Upcoming Earnings - The upcoming earnings release is anticipated, with projected earnings per share (EPS) of $0.29, indicating a 9.38% decrease from the same quarter last year [2] - Revenue is expected to be $5.47 billion, reflecting a 13.46% decline compared to the year-ago quarter [2] Annual Estimates - For the annual period, earnings are estimated at $1.70 per share and revenue at $26.33 billion, representing increases of +14.86% and +3.45% respectively from the previous year [3] Analyst Estimates - Recent changes in analyst estimates are important, as upward revisions indicate analysts' positive outlook on the company's operations and profit generation capabilities [4] - The Zacks Rank system, which evaluates these estimates, has a strong track record, with 1 stocks averaging a +25% annual return since 1988 [6] Valuation Metrics - Freeport-McMoRan has a Forward P/E ratio of 22.88, which is higher than the industry average of 18.26, suggesting it is trading at a premium [7] - The company has a PEG ratio of 0.86, compared to the industry average of 0.84, indicating a favorable growth expectation relative to its price [8] Industry Context - The Mining - Non Ferrous industry, part of the Basic Materials sector, has a Zacks Industry Rank of 182, placing it in the bottom 28% of over 250 industries [9]

Group 1: Copper Market Outlook - Goldman Sachs forecasts a surge in U.S. copper imports due to expected tariffs, predicting a 25% duty on copper imports by year-end, which could lead to a 50-100% increase in net copper imports, adding 200,000 to 300,000 metric tons to domestic inventories by Q3 [1][2] - If this projection holds, U.S. copper stockpiles could rise from 95,000 tons to as much as 400,000 tons, representing around half of global reported inventories, resulting in historically low international market inventory levels [2] - For 2025, Goldman anticipates a global copper deficit of 180,000 tons driven by increased demand for electrification, economic stimulus in China, and slow mine growth, with a more pronounced supply imbalance in the second half of the year likely to catalyze higher prices [3] Group 2: Freeport-McMoRan Insights - Freeport-McMoRan, the largest U.S. copper producer, stands to benefit from the anticipated tariff scenario, especially if copper is designated as a critical mineral, which could unlock over $500 million annually in tax credits under the Inflation Reduction Act [4][5] - The company operates seven copper mines and one of two domestic copper smelters in the U.S., positioning it as a key supplier amid potential import restrictions, although higher production costs domestically due to lower ore grades necessitate policy support [6] - Freeport expects an 8% increase in U.S. copper production by 2025, with plans to double concentrator capacity at its Bagdad operation in Arizona, potentially adding 200-250 million pounds of copper annually [7] Group 3: Strategic Considerations - CEO Kathleen Quirk expressed optimism regarding the Trump administration's potential actions to support domestic production, emphasizing the importance of federal tax incentives for the copper industry [5] - Quirk also indicated interest in possibly returning to the Democratic Republic of Congo for new opportunities, highlighting Freeport's desire to operate any future projects in the region [8]

Group 1 - Freeport-McMoRan (FCX) shares increased by 9.3% to close at $38.16, following a notable trading volume compared to typical sessions, despite a 4.3% loss over the past four weeks [1] - The rally in FCX's stock is attributed to a surge in copper prices due to President Trump's suggestion of a 25% tariff on copper imports, alongside a weaker dollar and China's stimulus measures [2] - FCX is expected to report quarterly earnings of $0.29 per share, reflecting a year-over-year decline of 9.4%, with revenues projected at $5.54 billion, down 12.3% from the previous year [2] Group 2 - The consensus EPS estimate for FCX has been revised down by 11.9% over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] - FCX holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [4] - First Quantum Minerals (FQVLF), another company in the non-ferrous mining industry, saw its stock rise by 10.4% to $12.89, but has returned -11.6% over the past month [4]

Core Viewpoint - Freeport-McMoRan Inc. (FCX) is facing challenges due to declining copper prices, high production costs, and downward revisions in earnings estimates, despite having strong financial health and ongoing expansion projects [2][21]. Financial Performance - FCX is currently trading at a forward price/earnings ratio of 21.65X, which is approximately 10% higher than the Zacks Mining - Non Ferrous industry average of 19.77X [1]. - The stock has experienced a 15.7% decline in share price over the past six months, underperforming the industry's decline of 15.3% and the S&P 500's rise of 6.4% [2]. - Operating cash flows for FCX were around $1.4 billion in Q4 2024, with full-year 2024 cash flows climbing 35% year over year to $7.2 billion [15]. Production and Expansion - FCX is focused on expanding its production capacity, with significant projects underway, including a concentrator expansion at Cerro Verde in Peru, which is expected to add 600 million pounds of copper annually [12]. - The company is also evaluating a large-scale expansion at El Abra in Chile and conducting pre-feasibility studies in Arizona to define significant sulfide expansion opportunities [12]. Cost and Pricing Challenges - FCX's consolidated unit net cash costs per pound of copper increased by 9% year over year in Q4 2024, with expectations for further increases in 2025 [18]. - Copper prices fell nearly 12% in Q4 2024, closing at around $4 per pound, influenced by weak demand in China and uncertainties regarding U.S. tariffs [20]. Market Sentiment and Valuation - The Zacks Consensus Estimate for FCX's earnings has been revised downward over the past 60 days, reflecting negative sentiment in the market [9]. - Despite strong financial health, the premium valuation of FCX may not present a compelling investment opportunity at current levels [11]. Dividend and Shareholder Value - FCX offers a dividend yield of approximately 0.8%, with a payout ratio of 20%, indicating a sustainable dividend policy [17]. - The company has distributed $4.7 billion to shareholders through dividends and share purchases since June 30, 2021 [15].

Core Viewpoint - Freeport-McMoRan Inc's shares are experiencing an increase due to an upgrade from Jefferies, which raised its rating from "hold" to "buy" and increased the price target to $48 from $40, driven by improving free cash flow and cost reductions [1] Group 1 - Jefferies upgraded Freeport-McMoRan's rating and price target, indicating positive future growth prospects for the copper producer [1] - Ten out of eighteen analysts still rate Freeport-McMoRan as a "hold," suggesting potential for further upgrades in the future [2] - Options traders are showing bullish sentiment, with a put/call open interest ratio of 0.4, indicating strong short-term call-buying activity [2] Group 2 - Freeport-McMoRan stock is set to open above its 60-day moving average, a significant long-term resistance level, after recovering from a low of $34.89 [3] - The stock remains just below breakeven on both a year-to-date and year-over-year basis, indicating a challenging performance in the broader market context [3]

Production and Revenue - Freeport-McMoRan's copper production increased to 214 million pounds in 2024, up from 144 million pounds in 2023, reflecting successful implementation of new technologies and data analytics [19]. - In 2024, Freeport-McMoRan's consolidated revenues were primarily from copper (74%), gold (17%), and molybdenum (7%) sales [34]. - Copper production from the Morenci mine, Cerro Verde mine, and Grasberg minerals district accounted for 77% of the company's total copper production in 2024 [26]. - PT-FI sold 56% of its copper production in concentrate and 44% as cathode during 2024 [47]. - The company ranked third among the top 10 copper producers, accounting for approximately 6% of estimated total worldwide mined copper production in 2024 [82]. - PT-FI's production from the Grasberg minerals district was 1.8 billion pounds of copper and 1.9 million ounces of gold in 2024, an increase from 1.7 billion pounds of copper and 2.0 million ounces of gold in 2023 [191]. Environmental and Regulatory Compliance - As of December 31, 2024, the company recorded $2.0 billion for environmental obligations and $3.7 billion for asset retirement obligations, with environmental capital expenditures totaling $0.6 billion in 2024 [56]. - The company expects to incur approximately $0.6 billion in environmental costs in 2025, reflecting ongoing compliance with environmental laws and regulations [56]. - PT-FI's Tailings Management Roadmap was approved for the next phase extending from 2025 to 2030, focusing on continuous improvement in tailings management practices [72]. - The company is subject to extensive U.S. and international regulations regarding worker health and safety, with new regulations potentially increasing mining costs [77]. Production Capacity and Infrastructure - The Morenci operation has a milling design capacity of 132,000 metric tons of ore per day, with a total EW tank house capacity of approximately 900 million pounds of copper per year [94]. - The Sierrita operation has a milling design capacity of 100,000 metric tons of ore per day, producing copper and molybdenum concentrate [118]. - The Miami operation has a design capacity of 200 million pounds of copper per year, although it is currently producing from stockpiles [126]. - The Chino operation includes a concentrator with a milling design capacity of 36,000 metric tons of ore per day and a 150 million pound-per-year SX/EW plant [134]. - Cerro Verde operates a 100,000-metric-ton-per-day ROM leach system with a production capacity of approximately 200 million pounds of copper per year [164]. Future Projects and Investments - The potential expansion project at Bagdad aims to increase copper production by 200 to 250 million pounds per year at an estimated capital cost of approximately $3.5 billion [104]. - The company has initiated pre-feasibility studies in the Lone Star district of Safford to explore significant expansion opportunities, with completion expected in 2026 [110]. - PT-FI plans to invest approximately $1 billion in a new gas-fired combined cycle facility over the next three years to reduce Scope 1 GHG emissions [193]. - Kucing Liar is expected to produce over 7 billion pounds of copper and 6 million ounces of gold between 2029 and 2041, with capital investments estimated at $4 billion over the next 7 to 8 years [204]. Production Trends and Changes - Morenci mine produced 0.7 billion pounds of copper and 3 million pounds of molybdenum in 2024, down from 0.8 billion pounds of copper and 3 million pounds of molybdenum in 2023 [95]. - Sierrita's copper production totaled 165 million pounds in 2024, a decrease from 185 million pounds in 2023 and 184 million pounds in 2022 [119]. - Miami's copper production was 9 million pounds in 2024, down from 12 million pounds in 2023 and 11 million pounds in 2022 [127]. - Chino's copper production reached 133 million pounds in 2024, compared to 141 million pounds in 2023 and 130 million pounds in 2022 [135]. - Tyrone's copper production was 43 million pounds in 2024, a decline from 51 million pounds in 2023 and 59 million pounds in 2022 [140]. Technological Advancements - The company is focused on enhancing productivity and managing costs to support long-term profitable growth and value creation [17]. - The company is pursuing the conversion of Bagdad's haul truck fleet to become fully autonomous, with testing expected to begin in Q2 2025 [101]. - The company has committed to maintaining the Copper Mark and/or Molybdenum Mark at all operating sites globally, demonstrating responsible production performance [83]. Financial Transactions - In September 2024, the company purchased 5.3 million shares of Cerro Verde common stock for $210 million, increasing its ownership interest to 55.08% [160].

Core Viewpoint - Freeport-McMoRan's stock has declined by almost 22% despite a rise in copper prices, suggesting the sell-off may be overdone and the stock could represent a good value opportunity [1][10] Group 1: Reasons for Stock Decline - The decline in Freeport's stock can be attributed to three main factors, including potential tariff effects, operational challenges, and production downgrades [2] - Management indicated that U.S.-produced copper sales could benefit from any premium due to tariffs, while copper from Indonesia primarily goes to China [3] - A fire at a new smelter in Indonesia and repairs to mills have contributed to lowered production expectations for 2025 [4] Group 2: Long-term Growth Initiatives - Freeport's leaching initiative aims to recover 800 million pounds per annum from previously considered waste material, which could significantly expand profit margins [5] - The leaching cost is currently below $1 per pound, compared to a net cash cost of $1.56 per pound in the fourth quarter [6] - Cost reduction measures, including the use of autonomous trucks and new technology, are expected to enhance profit margins and offset lower-grade mining [7] Group 3: Future Expansion Opportunities - Freeport has several potential expansion projects, including a 200-250 million pound opportunity in Bagdad, Arizona, and a 300-400 million pound expansion in Lone Star, Arizona, expected to begin in the 2030s [8] - The expectation for an extension to operate in Indonesia beyond 2041 remains unchanged, although it is still a point of observation [9] Group 4: Valuation Perspective - The market has unduly punished Freeport for short-term issues, which do not alter the long-term outlook, and the company continues to make progress on its leaching initiative [10] - If copper prices remain around $4.45, Freeport could generate nearly $13 billion in EBITDA in 2026/2027, leading to an attractive EV/EBITDA multiple of 4.4 times [11]