Briefing From The Editor -- FCX Stock

Now trading at a price of $35.47, Freeport-McMoRan has moved -0.4% so far today.

Freeport-McMoRan returned gains of 22.0% last year, with its stock price reaching a high of $46.73 and a low of $28.16. Over the same period, the stock outperformed the S&P 500 index by 3.0%. More recently, the company's 50-day average price was $38.58. Freeport-McMoRan Inc. engages in the mining of mineral properties in North America, South America, and Indonesia. Based in Phoenix, AZ, the large-cap Basic Materials company has 25,600 full time employees. Freeport-McMoRan has offered a 1.7% dividend yield over the last 12 months.

The Business Runs With Low Leverage Levels:

2018-02-20 2019-02-15 2020-02-14 2021-02-16 2022-02-15 2023-02-15
Revenue (MM) $16,403 $18,628 $14,402 $14,198 $22,845 $22,780
Operating Margins 23% 25% 5% 15% 37% 31%
Net Margins 11.0% 14.0% -2.0% 4.0% 19.0% 15.0%
Net Income (MM) $1,817 $2,602 -$239 $599 $4,306 $3,468
Net Interest Expense (MM) -$801 -$945 -$620 -$598 -$602 -$560
Depreciation & Amort. (MM) -$1,714 -$1,754 -$1,412 -$1,528 -$1,998 -$2,019
Earnings Per Share $1.25 $1.78 -$0.16 $0.41 $2.91 $2.39
EPS Growth n/a 42.4% -108.99% 356.25% 609.76% -17.87%
Diluted Shares (MM) 1,454 1,458 1,451 1,461 1,482 1,451
Free Cash Flow (MM) $6,076 $5,834 $2,073 $3,048 $8,200 $6,771
Capital Expenditures (MM) -$1,410 -$1,971 -$591 -$31 -$485 -$1,632
Net Current Assets (MM) -$15,380 -$13,604 -$15,446 -$14,173 -$10,173 -$10,609
Long Term Debt (MM) $11,815 $11,124 $9,821 $9,677 $9,078 $9,583
Net Debt / EBITDA 1.56 1.08 3.56 1.66 0.13 0.27

Freeport-McMoRan has an excellent current ratio, low leverage, and a strong EPS growth trend. Furthermore, Freeport-McMoRan has weak revenue growth and a flat capital expenditure trend, average net margins with a positive growth rate, and irregular cash flows.

Freeport-McMoRan's P/B and P/E Ratios Are Higher Than Average:

Freeport-McMoRan has a trailing twelve month P/E ratio of 26.2, compared to an average of 10.03 for the Basic Materials sector. Based on its EPS guidance of $2.1, the company has a forward P/E ratio of 18.4. Freeport-McMoRan's PEG ratio is 2.97 on the basis of the 8.8% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. Furthermore, Freeport-McMoRan is likely overvalued compared to the book value of its equity, since its P/B ratio of 3.14 is higher than the sector average of 2.08. The company's shares are currently trading 16.8% above their Graham number.

There's an Analyst Consensus of Strong Upside Potential for Freeport-McMoRan:

The 17 analysts following Freeport-McMoRan have set target prices ranging from $41.0 to $57.0 per share, for an average of $47.71 with a buy rating. As of April 2023, the company is trading -19.1% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

Freeport-McMoRan has a very low short interest because 1.1% of the company's shares are sold short. Institutions own 81.0% of the company's shares, and the insider ownership rate stands at 0.57%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 8% stake in the company is worth $4,223,182,383.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.