Freeport-McMoRan Inc. (FCX), headquartered in Phoenix, Arizona, mines mineral properties in North America, South America, and Indonesia. Valued at $62.67 billion by market cap, the company operates diverse assets with significant proven and probable copper, gold, and molybdenum reserves. Its portfolio of assets includes the Grasberg minerals district in Indonesia and significant operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America.
The leading international mining company has underperformed the broader market considerably over the past year. FCX has declined marginally over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 19%. In 2024, shares of FCX are up 2.5%, while the SPX is up 14.2% on a YTD basis.
Narrowing the focus, FCX’s underperformance is also apparent compared to the US Basic Materials iShares ETF (IYM). The exchange-traded fund has gained about 4.4% over the past year compared to FCX’s marginal losses for the period. Moreover, the ETF’s 4% gains on a YTD basis outshine the stock’s returns over the same time frame.
On Jul. 18, FCX shares closed down more than 5% after COMEX copper (HGU24) fell more than 3% to a 3-1/4 month low. The fall in copper prices was due to the absence of stimulus measures from China, the world’s biggest consumer of metals. Copper’s fall over the past two months can be attributed to China’s economy growing more slowly than expected, making the demand outlook for metals such as copper appear weak.
On Jul. 23, FCX shares closed down more than 1% after the company reported its Q2 results. Its adjusted EPS was $0.46, surpassing the consensus estimates of $0.39. The company revenue of $6.62 billion beat Wall Street expectations of $5.99 billion.
For the current fiscal year, ending in December, analysts expect FCX to report an EPS growth of 8.4% to $1.67 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 16 analysts covering FCX stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, two “Moderate Buys,” and five “Holds.”
This configuration is slightly more bullish than three months ago, with eight analysts suggesting a “Strong Buy” and one giving a “Moderate Buy.”
Recently, UBS Group gave a “Neutral” rating on FCX stock and raised the price target from $41 to $54, implying a potential upside of 23.8% from current levels.
The mean price target of $54.88 represents a 25.8% premium to FCX’s current price levels. The Street-high price target of $63 suggests an ambitious upside potential of 44.4%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
