Buy Or Fear Freeport-McMoRan Stock?

Freeport-McMoRan (NYSE:FCX) stock looks fairly priced – making it an ambivalent pick to buy at its current price of around $33. We believe there are a few concerns with FCX stock, which makes it fairly priced given that its current valuation looks low.

We arrive at our conclusion by comparing the current valuation of FCX stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Freeport-McMoRan along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a weak operating performance and financial condition, as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Freeport-McMoRan’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, FCX stock looks slightly cheap compared to the broader market.

• Freeport-McMoRan has a price-to-sales (P/S) ratio of 1.9 vs. a figure of 2.8 for the S&P 500

How Have Freeport-McMoRan’s Revenues Grown Over Recent Years?

Freeport-McMoRan’s Revenues have grown marginally over recent years.

• Freeport-McMoRan has seen its top line grow at an average rate of 3.8% over the last 3 years (vs. increase of 6.2% for S&P 500)
• Its revenues have grown 11.4% from $23 Bil to $25 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues shrank 3.1% to $5.7 Bil in the most recent quarter from $5.9 Bil a year ago (vs. 4.9% improvement for S&P 500)

How Profitable Is Freeport-McMoRan?

Freeport-McMoRan’s profit margins are around the median level for companies in the Trefis coverage universe.

• Freeport-McMoRan’s Operating Income over the last four quarters was $6.9 Bil, which represents a high Operating Margin of 27.0% (vs. 13.1% for S&P 500)

Does Freeport-McMoRan Look Financially Stable?

Freeport-McMoRan’s balance sheet looks fine.

• Freeport-McMoRan’s Debt figure was $9.7 Bil at the end of the most recent quarter, while its market capitalization is $48 Bil (as of 4/16/2025). This implies a moderate Debt-to-Equity Ratio of 20.2% (vs. 21.5% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $3.9 Bil of the $55 Bil in Total Assets for Freeport-McMoRan.  This yields a moderate Cash-to-Assets Ratio of 7.2% (vs. 15.0% for S&P 500)

How Resilient Is FCX Stock During A Downturn?

FCX stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on FCX stock? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

• FCX stock fell 51.7% from a high of $51.93 on 25 March 2022 to $25.09 on 14 July 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 29 April 2024
• Since then, the stock has increased to a high of $54.86 on 20 May 2024 and currently trades at around $33

Covid Pandemic (2020)

• FCX stock fell 60.8% from a high of $13.53 on 13 January 2020 to $5.31 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 15 July 2020

Global Financial Crisis (2008)

• FCX stock fell 86.7% from a high of $62.93 on 20 May 2008 to $8.40 on 5 December 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock is yet to recover to its pre-Crisis high

Putting All The Pieces Together: What It Means For FCX Stock

In summary, Freeport-McMoRan’s performance across the parameters detailed above are as follows:

• Growth: Neutral
• Profitability: Neutral
• Financial Stability: Neutral
• Downturn Resilience: Very Weak
• Overall: Neutral

This is aligned with the stock’s low valuation because of which we think it is fairly priced, which supports our conclusion that FCX is an ambivalent stock to buy.

While it doesn’t look like there is much upside to FCX stock, the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

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