Freeport-McMoRan Inc. (FCX): what the price requires
At today's price, Freeport-McMoRan Inc. (FCX) is priced for +19.3% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/FCX
Headline
| Field | Value |
|---|---|
| Ticker | FCX |
| Company | Freeport-McMoRan Inc. |
| Current price | $59.97/sh |
| Composition | U.S. 35% / Switzerland 21% / Japan 11% / Indonesia 8% / Singapore 5% / United Kingdom 4% / Spain 3% / China 2% / Chile 2% / Germany 1% / France 1% / Egypt 1% / South Korea 1% / India 1% / Philippines 0% / Other 4% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 21.8% |
| Operating margin today | 29.6% |
| Margin compression implied | -7.8pp |
| Implied growth | 19.3% |
| Multiple paid | 12x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 12.7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.2pp.
Reconcile: at the x-ray's 9.3% required return this reads ~0.4%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.43σ |
| cohort percentile (of 76 peers) | 21 |
| sustained it ~5 years at this level | 44% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.69x | 5 | expensive |
| Earnings | 3.47x | 5 | expensive |
| Relative | 1.37x | 5 | expensive |
| Growth | 1.26x | 3 | expensive |
Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $22.54 | 2.66x | yes | FCF base $1.8B, growth 6% (input: historical growth), terminal g 4.0%, WACC 8.7%, 5yr projection |
| DCF Exit Multiple | Growth | $53.32 | 1.12x | yes | Exit EV/EBITDA: 6.9x / 11.9x / 16.9x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $43.74 | 1.37x | yes | P/E 14x (static sector reference · 2026-04), scenarios: 10.5x / 14.0x / 16.8x (bear / base = reference held flat / bull), EV/EBITDA 8x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $35.53 | 1.69x | yes | BV/sh $13.51, ROE (TTM) 24.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $57.77 | 1.04x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $47.46 | 1.26x | yes | Rev $26.4B, growth 6% (input: historical growth; tapered), Terminal P/S: 2.5x / 3.3x / 3.9x (bear / base = today's held flat / bull, cap 6x) |
| Peter Lynch Fair Value | Relative | $56.00 | 1.07x | yes | EPS $1.60, growth 35% (input: historical EPS growth), PEG=0.52 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $40.05 | 1.50x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $7.12B × (1−21%) / WACC 8.7% → EPV (no growth) |
| Residual Income | Asset | $52.24 | 1.15x | yes | BV $13.51 + 5yr PV of (ROE (TTM) 24.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $22.05 | 2.72x | yes | √(22.5 × EPS $1.60 × BVPS $13.51) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $38.62 | 1.55x | yes | EBITDA $7.87B × sector EV/EBITDA 8.0x |
| FCF Yield | Earnings | $8.16 | 7.35x | yes | FCF $1752.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $7.14 | 8.40x | yes | SBC-adj FCF $1.62B (FCF $1.75B − SBC $0.14B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $51.63 | 1.16x | yes | EPS $1.60 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $9.88 | 6.07x | yes | BV $13.51 × (ROIC 6.3% / WACC 8.7%) |
| P/Sales Sector | Relative | $27.47 | 2.18x | yes | Revenue $26.44B × sector P/S 1.5x |
| PEG Fair Value | Relative | $60.00 | 1.00x | yes | EPS $1.60 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $17.30 | 3.47x | yes | EPS $1.60 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $5.7b |
| Net debt / NOPAT (after-tax) | 0.92x |
| Net debt / operating income (pre-tax) | 0.72x |
| Share count CAGR (buyback) | -0.4% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
At $68.66 Freeport-McMoRan is priced at about 13x company-wide operating income, implying roughly 23.2% operating growth a year (within its recent pace); no valuation family reaches the price, and the reverse-DCF band of about $41 to $66 sits below the current level, so the price embeds a strong-copper outcome.
The bull is the copper macro and the orebody: realized copper rose to $5.78 per pound, Q1 2026 net income jumped to $881 million from $352 million, and the Grasberg minerals district is a world-class, long-life deposit with operating rights extended beyond 2041 via a government memorandum of understanding.
The risk is the flagship ramp and the metal price: the September 2025 mud rush forced a slower Grasberg Block Cave ramp and a 2026 guidance cut to 3.1 billion pounds of copper, prompting analyst downgrades, while net debt near $5.7 billion and a price above every valuation frame leave little cushion if copper softens.
Bull Case
Valuing a copper miner is a bet on two things you cannot model precisely: the price of the metal and the life of the orebody. Static valuation frames built for stable businesses systematically struggle here, because a miner's earnings swing with the copper price and its asset value depends on reserves that deplete and re-rate. Freeport-McMoRan is the purest large-cap expression of that trade. Its filing describes significant proven and probable reserves of copper, gold, and molybdenum and names it as one of the world's largest publicly traded copper producers, anchored by the Grasberg minerals district in Indonesia, one of the world's largest copper and gold deposits (accession 0000831259-25-000006). The bull case starts from that asset: irreplaceable, long-life, low-cost ore in a structurally short copper market.
The copper thesis is the macro tailwind. Electrification, grid build-out, data-center power, and electric vehicles all consume copper, while new large deposits are scarce and slow to permit. That supply-demand setup is why realized prices have moved the way they have: in the first quarter of 2026 Freeport's average realized copper price rose to $5.78 per pound from $4.44, gold to $4,889 per ounce, and the company earned net income of $881 million, up from $352 million a year earlier, on revenue of $6.23 billion. When the metal prices rise, a low-cost producer's profit rises faster, and Freeport is geared to exactly that.
The implied bar is consistent with what the company has delivered. At $68.66 the price embeds operating growth of about 23.2% a year for five years, which the inversion reads as within what Freeport has recently produced; the stretch is duration, not rate, and the price-to-earnings multiple sits in the lower half of the peer range. Crucially, a memorandum of understanding with the Indonesian government outlines life-of-resource operating rights at Grasberg beyond 2041, extending the runway of the crown-jewel asset. The bull wager is that a long-life, low-cost copper franchise, levered to a metal the world increasingly needs and with its flagship mine's life secured, is worth owning even at a full price.
Bear Case
The moat in mining is the orebody, and Freeport's is being chipped at by operational reality at the very asset that defines it. The September 2025 mud rush at Grasberg forced a phased, slower-than-planned ramp-up of the Block Cave underground mine, and the company revised 2026 sales guidance down to 3.1 billion pounds of copper and 650 thousand ounces of gold, with full capacity now not expected until roughly 80% by mid-2027. Grasberg copper and gold production dropped sharply year over year as a result. The data shows the erosion plainly: the crown-jewel mine is producing less than planned, on a longer timeline, and the market noticed, with analyst downgrades (including from Morgan Stanley) and a significant stock decline following the revised guidance. A concentrated, single-flagship asset means one operational setback is a company-wide setback.
The valuation amplifies the risk because no standard frame reaches the price. That means the buyer is paying for an outcome no conventional method fully supports, which for a commodity producer is a precarious place to be, because the one variable holding the price up (the copper price) is the one nobody at the company controls. If copper softens, the rich price has a long way to fall toward the asset and earnings frames.
The geopolitical and capital cautions complete the picture. The flagship asset sits in Indonesia, where operating rights, ownership terms, and export rules are subject to government negotiation; the post-2041 life-of-resource framework is a memorandum of understanding still subject to definitive agreements and license amendments, not a done deal. Net debt sits near $5.7 billion, manageable at current metal prices but a fixed claim that bites harder in a downturn. The bear's summary is direct: this is a high-quality but finite, single-flagship orebody whose ramp is faltering, valued above every standard frame, levered to a metal price it cannot set and to a host government it must keep onside.
Valuation
Freeport-McMoRan is priced at about 13x company-wide operating income, which inverts to roughly 23.2% operating-income growth a year for five years at a 12.4% cost of capital. The inversion reads that as within range against the company's own recent record (the demanding part is duration, not rate), and notes the peer multiple sits in the lower half of its range.
The method families tell the cautionary version. No valuation family reaches the price: the stock is rich on assets, on earnings power, on peers, and even on forward growth. For a commodity producer that configuration is a clear flag, because it means the price embeds metal-price and production assumptions that none of the standard frames fully credit. The bull reads this as the static frames being unable to price a long-life, irreplaceable copper asset in a structurally short market; the bear reads it as the price already capitalizing peak metal prices and a smooth Grasberg ramp that is not happening on schedule.
The honest read: this is a high-quality copper franchise priced for a strong copper environment to persist while its flagship mine is mid-ramp. The strengths are concrete: realized copper at $5.78 per pound drove Q1 net income to $881 million, the orebody is world-class, and the Indonesian life-of-resource framework extends Grasberg's runway. The risks are equally concrete: the Block Cave ramp was delayed after the September 2025 mud rush, 2026 guidance was cut, and the price exceeds every valuation frame. The cleaner way to weigh it is to treat the implied 23.2% growth as a metal-price-dependent bound rather than a forecast, and to anchor on normalized, mid-cycle copper economics and the pace of the Grasberg ramp rather than on a single strong quarter.
Catalysts
The defining recent catalyst was the first-quarter 2026 report, where strong earnings were overshadowed by Grasberg news. Net income attributable to common stockholders was $881 million, up from $352 million a year earlier, on revenue of $6.23 billion, driven by higher realized prices: copper at $5.78 per pound (from $4.44), gold at $4,889 per ounce, and molybdenum at $25.21 per pound (Freeport 8-K, StockTitan, Investing.com).
The negative catalyst was the Grasberg ramp. After the September 2025 mud rush, the company began a phased ramp-up of the Block Cave underground mine but cut 2026 sales guidance to 3.1 billion pounds of copper and 650 thousand ounces of gold, with the ramp now targeting about 65% of capacity in the second half of 2026 and around 80% by mid-2027. The revision prompted analyst downgrades, including from Morgan Stanley, and a significant stock decline. Separately, a memorandum of understanding with the Indonesian government outlines life-of-resource operating rights at Grasberg beyond 2041, subject to definitive agreements (247WallSt, Mining.com, StockTitan).
The forward catalysts are the copper price and the Grasberg ramp trajectory. The thesis turns on whether copper prices hold near recent levels and whether the Block Cave ramp proceeds on the revised timeline without further setbacks. Continued high realized prices plus an on-track ramp would validate the full price; another production downgrade, a copper-price pullback, or any friction in finalizing the Indonesian agreements would be the clearest near-term risks. The next quarterly print and the half-year Grasberg capacity update are the things to watch (Investing.com, 247WallSt).
Peer Cohorts (Per Segment, With Filing Citations)
Morenci / Cerro Verde +3 more (reported)
- SCCO (SOUTHERN COPPER CORPORATION)
- (no filing in the citation store)
- NEXA (NEXA RESOURCES S.A.)
- (no filing in the citation store)
- B (BARRICK MINING CORP)
- (no filing in the citation store)
- NEM (NEWMONT CORPORATION)
- (no filing in the citation store)
- KGC (KINROSS GOLD CORP)
- (no filing in the citation store)
- GFI (Gold Fields Limited)
- (no filing in the citation store)
- AGI (ALAMOS GOLD INC.)
- (no filing in the citation store)
- PAAS (Pan American Silver Corp.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.