Freeport Stock Falls Further, But It May Be Time To Buy
The stock price of Freeport-McMoRan (NYSE: FCX) one of the largest producers of copper, has declined by about 4% over the last week (five trading days) and remains down by 35% over the last month. This compares to the S&P 500 which remains down by about 7% over the last month. Copper prices are down from a high of about $4.86/lb in early March 2022 to about $3.50/lb currently, marking a decline of almost 28%. Although there are multiple long-term drivers of copper demand, including rising demand from the renewable energy sector and the electric vehicles market, the near-term outlook for the commodity is somewhat bearish. With inflation surging, the U.S. Federal Reserve and other central banks have been hiking interest rates at a more aggressive pace and the markets are betting that this will hurt economic growth. The construction and electrical applications sectors – which are the largest consumers of copper – typically see activity cool off during downturns and this could impact demand and pricing for the metal. Separately, the recent Covid-19-related lockdowns in China, one of the largest copper consumers, have also impacted demand for the commodity, hurting prices.
However, now that FCX stock has seen a decline of about 35% over the last month, will it continue its downward trajectory in the near term, or is a rally imminent? Going by historical performance, there is a strong chance of a rise in FCX stock over the next month. Out of 45 instances in the last ten years that FCX stock saw a twenty-one-day decline of 35% or more, 33 of them resulted in FCX stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 33 out of 45, or about 73% chance of a rise in FCX stock over the coming month, implying a positive near-term outlook for the stock. See our analysis on Freeport-McMoRan Stock Chance of A Rise for more details.
While FCX stock has declined recently, several peers in its sector still look like a better bet than Freeport. Check out how Freeport Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
- Why FCX Stock Hasn’t Gained Much From Record Gold Prices?
- Will Freeport Stock Recover To Pre-Inflation Shock Highs Of $52 Per Share?
- What To Expect From Freeport’s Q2 Results
- How Is Freeport Stock Faring Amid Volatile Copper Prices?
- Copper Prices Have Recovered A Bit. Is Freeport Stock Worth A Look?
- Lower Copper Prices Will Weigh On Freeport’s Q3 Results
Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years data
- After moving -4.3% or more over five days, the stock rose in the next five days on 48% of the occasions.
- After moving -5.3% or more over ten days, the stock rose in the next ten days on 55% of the occasions
- After moving -35% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 73% of the occasions.
This pattern suggests that FCX stock is likely to see gains in the near term.
With inflation rising and the Fed raising interest rates, Freeport has fallen 33% this year. Can it drop more? See how low can Freeport stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.
Returns | Jul 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
FCX Return | -4% | -33% | 112% |
S&P 500 Return | 3% | -18% | 74% |
Trefis Multi-Strategy Portfolio | 6% | -18% | 221% |
[1] Month-to-date and year-to-date as of 7/10/2022
[2] Cumulative total returns since the end of 2016
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