investorscraft@gmail.com

Intrinsic Value of Freeport-McMoRan Inc. (FCX)

Previous Close$45.80
Intrinsic Value
Upside potential
Previous Close
$45.80

VALUATION INPUT DATA

This valuation is based on fiscal year data as of 2024 and quarterly data as of .

Data is not available at this time.

Stock Valuation Context

Business Model And Market Position

Freeport-McMoRan Inc. (FCX) is a leading international mining company specializing in the extraction and production of copper, gold, and molybdenum. The company operates large-scale, long-lived assets primarily in North and South America, including the Grasberg minerals district in Indonesia, one of the world's largest copper and gold deposits. FCX's revenue model is driven by commodity prices, production volumes, and operational efficiency, with copper accounting for the majority of its sales. The company serves global industrial markets, including construction, electronics, and renewable energy sectors, where copper demand is closely tied to economic growth and infrastructure development. FCX maintains a competitive edge through its low-cost production capabilities, strategic reserves, and vertically integrated operations, which include smelting and refining. As a key player in the copper industry, FCX benefits from its scale, geographic diversification, and long-term supply agreements, positioning it to capitalize on rising demand for copper in electrification and green energy transitions. The company's market position is further reinforced by its focus on sustainable mining practices and stakeholder engagement, aligning with global ESG standards.

Revenue Profitability And Efficiency

In FY 2024, FCX reported revenue of $25.5 billion, with net income of $1.9 billion and diluted EPS of $1.31. Operating cash flow stood at $7.2 billion, reflecting strong cash generation from core operations. Capital expenditures totaled $4.8 billion, indicating significant reinvestment in production capacity and efficiency improvements. The company's profitability is closely tied to copper price fluctuations, with margins benefiting from cost discipline and operational scale.

Earnings Power And Capital Efficiency

FCX demonstrates robust earnings power, driven by its high-volume, low-cost copper production. The company's capital efficiency is evident in its ability to generate substantial operating cash flow relative to capital expenditures, supporting both growth initiatives and shareholder returns. With a focus on optimizing existing assets and expanding reserves, FCX maintains a balanced approach to capital allocation, prioritizing long-term value creation over short-term gains.

Balance Sheet And Financial Health

FCX's balance sheet remains solid, with $3.9 billion in cash and equivalents and total debt of $9.7 billion. The company's leverage is manageable, supported by strong cash flow generation and a disciplined approach to debt management. Liquidity is further reinforced by undrawn credit facilities, providing flexibility to navigate commodity price volatility and fund strategic investments.

Growth Trends And Dividend Policy

FCX's growth is underpinned by rising global copper demand, particularly from renewable energy and electrification trends. The company has consistently invested in expanding production capacity and extending mine lives. FCX pays a dividend of $0.60 per share, reflecting a commitment to returning capital to shareholders while maintaining sufficient liquidity for growth projects. Dividend sustainability is supported by stable cash flows and a conservative payout ratio.

Valuation And Market Expectations

FCX's valuation reflects its cyclical exposure to copper prices, with market expectations centered on long-term demand growth for copper in energy transition applications. The company trades at a premium to peers due to its low-cost production profile and strategic asset base. Investors price in both commodity price risks and FCX's ability to capitalize on secular demand trends.

Strategic Advantages And Outlook

FCX's strategic advantages include its tier-one asset portfolio, cost leadership, and exposure to copper's critical role in global decarbonization. The outlook remains positive, with demand tailwinds from electric vehicles, grid infrastructure, and renewable energy projects. Operational execution and disciplined capital allocation will be key to sustaining competitive advantages and delivering shareholder value in a dynamic commodity environment.

Sources

Company 10-K, investor presentations

show cash flow forecast

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year2025202620272028202920302031203220332034203520362037203820392040204120422043204420452046204720482049

INCOME STATEMENT

Revenue growth rate, %NaN
Revenue, $NaN
Variable operating expenses, $mNaN
Fixed operating expenses, $mNaN
Total operating expenses, $mNaN
Operating income, $mNaN
EBITDA, $mNaN
Interest expense (income), $mNaN
Earnings before tax, $mNaN
Tax expense, $mNaN
Net income, $mNaN

BALANCE SHEET

Cash and short-term investments, $mNaN
Total assets, $mNaN
Adjusted assets (=assets-cash), $mNaN
Average production assets, $mNaN
Working capital, $mNaN
Total debt, $mNaN
Total liabilities, $mNaN
Total equity, $mNaN
Debt-to-equity ratioNaN
Adjusted equity ratioNaN

CASH FLOW

Net income, $mNaN
Depreciation, amort., depletion, $mNaN
Funds from operations, $mNaN
Change in working capital, $mNaN
Cash from operations, $mNaN
Maintenance CAPEX, $mNaN
New CAPEX, $mNaN
Total CAPEX, $mNaN
Free cash flow, $mNaN
Issuance/(repurchase) of shares, $mNaN
Retained Cash Flow, $mNaN
Pot'l extraordinary dividend, $mNaN
Cash available for distribution, $mNaN
Discount rate, %NaN
PV of cash for distribution, $mNaN
Current shareholders' claim on cash, %NaN
HomeMenuAccount