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Freeport-McMoRan Up 11% in 6 Months: Buy, Sell or Hold the Stock?
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Key Takeaways
Freeport's shares rose 11.3% in six months, beating the industry and the S&P 500.
FCX's expansion projects aim to boost copper output, backed by a strong financial health.
Weaker copper sales and higher unit costs pose near-term margin pressure.
Freeport-McMoRan Inc.’s (FCX - Free Report) shares have gained 11.3% in the past six months. It has outperformed the Zacks Mining - Non Ferrous industry’s rise of 1.3% and the S&P 500’s gain of 7.3% over the same period. Its peers, Southern Copper Corporation (SCCO - Free Report) and BHP Group Limited (BHP - Free Report) , have gained 0.8% and 4.9%, respectively, in the same time. While FCX’s second-quarter results showed a rise in both top and bottom line on higher copper and gold prices, its guidance indicates higher expected unit costs and weaker copper and gold sales volumes.
Freeport’s Six-Month Price Performance
Image Source: Zacks Investment Research
Technical indicators show that FCX has been trading below the 50-day simple moving average (SMA) since July 30, 2025. The stock is currently trading above its 200-day SMA. Following a golden crossover on July 8, 2025, the 50-day SMA is reading higher than the 200-day SMA, indicating a bullish trend.
FCX Stock Trades Below 50-Day SMA
Image Source: Zacks Investment Research
Let’s take a look at FCX’s fundamentals to better analyze how to play the stock.
Freeport’s Growth Actions to Drive Capacity & Production
Freeport is well-placed with high-quality copper assets and remains focused on strong execution and advancing its organic growth opportunities. At its Cerro Verde operation in Peru, a large-scale concentrator expansion provided incremental annual production of around 600 million pounds of copper and 15 million pounds of molybdenum. It is evaluating a large-scale expansion at El Abra in Chile to define a large sulfide resource that could potentially support a major mill project similar to the large-scale concentrator at Cerro Verde.
FCX is also conducting pre-feasibility studies (expected to be completed in 2026) in the Safford/Lone Star operations in Arizona to define a significant sulfide expansion opportunity. It also has expansion opportunities at Bagdad in Arizona to more than double the concentrator capacity of the operation.
Also, PT Freeport Indonesia (PT-FI) substantially completed the construction of the new greenfield smelter in Eastern Java during 2024, with start-up commenced in second-quarter 2025. The first production of copper anode was achieved in July 2025. PT-FI is also developing the Kucing Liar ore body within the Grasberg district with a targeted commencement of production by 2030. Gold production also commenced at the new precious metals refinery in late 2024. Plans are in place to transition PT-FI’s existing energy source from coal to natural gas, which is expected to significantly reduce greenhouse gas emissions at Grasberg.
FCX’s Solid Financial Health & Capital Discipline Bode Well
FCX has a strong liquidity position and generates substantial cash flows, which allow it to finance its growth projects, pay down debt and drive shareholder value. It generated operating cash flows of around $2.2 billion in the second quarter of 2025. It has distributed $5.2 billion to its shareholders through dividends and share purchases since June 30, 2021. Freeport ended the second quarter with strong liquidity, including $4.5 billion in cash and cash equivalents, $3 billion in availability under the FCX revolving credit facility, and $1.5 billion in availability under the PT-FI credit facility.
At the end of the second quarter, Freeport had a net debt of $1.5 billion, excluding PTFI’s new downstream processing facilities. Its net debt is below its targeted range of $3-$4 billion. Freeport has a policy of distributing 50% of the available cash to shareholders and the balance to either reduce debt or invest in growth projects. FCX has no significant debt maturities until 2027. Its long-term debt-to-capitalization is around 22.9% compared with 40.2% for Southern Copper and 26.7% for BHP Group.
FCX offers a dividend yield of roughly 0.7% at the current stock price. Its payout ratio is 20% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of about 19.4%. Backed by strong financial health, the company's dividend is perceived to be safe and reliable.
Retreating Copper Prices Pose Concerns for FCX
Copper prices remained volatile in the second quarter amid global economic and trade uncertainties. After racking up solid gains in late March, copper prices slipped to around $4.1 per pound in early April amid demand worries due to tariffs, which threatened to cause a broader slowdown globally. However, prices of the red metal moved up in late April to roughly $4.9 per pound amid a weakening U.S. dollar on heightened concerns about the prospect of a downturn in the U.S. economy. Prices again retreated to around $4.7 per pound in late May on weak global demand and increased supply. Prices recovered in June to close the second quarter above the $5 per pound level, leading to a roughly 25% gain in the first six months of 2025.
However, prices have again retreated to below $4.5 per pound lately amid increased supply, currently hovering just above $4.4 per pound. Weaker global manufacturing activities pose risks to copper demand. Copper demand is also likely to remain under pressure due to tariffs.
Higher Unit Costs May Weigh on Freeport’s Q3 Margins
FCX saw a notable reduction in its average unit net cash cost per pound of copper in the second quarter to just $1.13 from $1.73 a year earlier and well below its guidance of $1.50. The decline was fueled by operational efficiencies, higher gold credits and an uptick in copper sales volumes.
Freeport's outlook for the third quarter, however, suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $1.59 per pound, while still projecting a full-year average of roughly $1.55. Lower expected sales volumes are likely to impact costs in the quarter. The potential impacts of tariffs may lead to further upside to the projected costs. FCX estimates that the tariffs could potentially increase the cost of goods it purchases in the United States by roughly 5%. Higher costs are likely to weigh on the company's margins.
FCX’s Tepid Volume Outlook Points to Challenges Ahead
Freeport’s copper sales volumes increased around 9% year over year in the second quarter to 1,016 million pounds, primarily driven by shipment timing. The company sold 522,000 ounces of gold, reflecting around 45% year-over-year growth. FCX also sold 22 million pounds of molybdenum, up about 4.8% from the year-ago quarter.
Freeport has provided a tepid copper sales volume outlook for the third quarter, which suggests modestly lower volumes on a sequential basis. FCX expects copper sales volumes of 990 million pounds, indicating a 4% year-over-year decline. It has also provided a weaker gold and molybdenum sales volumes guidance of 350,000 ounces and 18 million pounds, respectively, reflecting sequential and year-over-year declines. The lack of growth in volumes may impact the company’s performance.
FCX’s Earnings Estimates Going Up
Freeport’s earnings estimates have been going up over the past 60 days. The Zacks Consensus Estimate for 2025 and 2026 has been revised higher over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $1.74, suggesting year-over-year growth of 17.6%. Earnings are expected to register roughly 33.8% growth in 2026.
Image Source: Zacks Investment Research
A Look at FCX’s Valuation
FCX is currently trading at a forward price/earnings of 19.52X, a roughly 2% premium to the industry average of 19.13X. The FCX stock is trading at a discount to Southern Copper and a premium to BHP Group.
FCX’s P/E F12M Vs. Industry, SCCO and BHP
Image Source: Zacks Investment Research
Final Thoughts: Hold FCX Stock for Now
FCX is poised to gain from progress in expansion activities that will boost production capacity. Robust financial health allows FCX to invest in growth projects and drive shareholder value. Rising earnings estimates and healthy dividend growth are the other positives. Despite these positives, the recent pullback in copper prices, weaker sales volume outlook and higher expected unit costs warrant caution. Holding onto this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
Image: Bigstock
Freeport-McMoRan Up 11% in 6 Months: Buy, Sell or Hold the Stock?
Key Takeaways
Freeport-McMoRan Inc.’s (FCX - Free Report) shares have gained 11.3% in the past six months. It has outperformed the Zacks Mining - Non Ferrous industry’s rise of 1.3% and the S&P 500’s gain of 7.3% over the same period. Its peers, Southern Copper Corporation (SCCO - Free Report) and BHP Group Limited (BHP - Free Report) , have gained 0.8% and 4.9%, respectively, in the same time. While FCX’s second-quarter results showed a rise in both top and bottom line on higher copper and gold prices, its guidance indicates higher expected unit costs and weaker copper and gold sales volumes.
Freeport’s Six-Month Price Performance
Technical indicators show that FCX has been trading below the 50-day simple moving average (SMA) since July 30, 2025. The stock is currently trading above its 200-day SMA. Following a golden crossover on July 8, 2025, the 50-day SMA is reading higher than the 200-day SMA, indicating a bullish trend.
FCX Stock Trades Below 50-Day SMA
Let’s take a look at FCX’s fundamentals to better analyze how to play the stock.
Freeport’s Growth Actions to Drive Capacity & Production
Freeport is well-placed with high-quality copper assets and remains focused on strong execution and advancing its organic growth opportunities. At its Cerro Verde operation in Peru, a large-scale concentrator expansion provided incremental annual production of around 600 million pounds of copper and 15 million pounds of molybdenum. It is evaluating a large-scale expansion at El Abra in Chile to define a large sulfide resource that could potentially support a major mill project similar to the large-scale concentrator at Cerro Verde.
FCX is also conducting pre-feasibility studies (expected to be completed in 2026) in the Safford/Lone Star operations in Arizona to define a significant sulfide expansion opportunity. It also has expansion opportunities at Bagdad in Arizona to more than double the concentrator capacity of the operation.
Also, PT Freeport Indonesia (PT-FI) substantially completed the construction of the new greenfield smelter in Eastern Java during 2024, with start-up commenced in second-quarter 2025. The first production of copper anode was achieved in July 2025. PT-FI is also developing the Kucing Liar ore body within the Grasberg district with a targeted commencement of production by 2030. Gold production also commenced at the new precious metals refinery in late 2024. Plans are in place to transition PT-FI’s existing energy source from coal to natural gas, which is expected to significantly reduce greenhouse gas emissions at Grasberg.
FCX’s Solid Financial Health & Capital Discipline Bode Well
FCX has a strong liquidity position and generates substantial cash flows, which allow it to finance its growth projects, pay down debt and drive shareholder value. It generated operating cash flows of around $2.2 billion in the second quarter of 2025. It has distributed $5.2 billion to its shareholders through dividends and share purchases since June 30, 2021. Freeport ended the second quarter with strong liquidity, including $4.5 billion in cash and cash equivalents, $3 billion in availability under the FCX revolving credit facility, and $1.5 billion in availability under the PT-FI credit facility.
At the end of the second quarter, Freeport had a net debt of $1.5 billion, excluding PTFI’s new downstream processing facilities. Its net debt is below its targeted range of $3-$4 billion. Freeport has a policy of distributing 50% of the available cash to shareholders and the balance to either reduce debt or invest in growth projects. FCX has no significant debt maturities until 2027. Its long-term debt-to-capitalization is around 22.9% compared with 40.2% for Southern Copper and 26.7% for BHP Group.
FCX offers a dividend yield of roughly 0.7% at the current stock price. Its payout ratio is 20% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of about 19.4%. Backed by strong financial health, the company's dividend is perceived to be safe and reliable.
Retreating Copper Prices Pose Concerns for FCX
Copper prices remained volatile in the second quarter amid global economic and trade uncertainties. After racking up solid gains in late March, copper prices slipped to around $4.1 per pound in early April amid demand worries due to tariffs, which threatened to cause a broader slowdown globally. However, prices of the red metal moved up in late April to roughly $4.9 per pound amid a weakening U.S. dollar on heightened concerns about the prospect of a downturn in the U.S. economy. Prices again retreated to around $4.7 per pound in late May on weak global demand and increased supply. Prices recovered in June to close the second quarter above the $5 per pound level, leading to a roughly 25% gain in the first six months of 2025.
However, prices have again retreated to below $4.5 per pound lately amid increased supply, currently hovering just above $4.4 per pound. Weaker global manufacturing activities pose risks to copper demand. Copper demand is also likely to remain under pressure due to tariffs.
Higher Unit Costs May Weigh on Freeport’s Q3 Margins
FCX saw a notable reduction in its average unit net cash cost per pound of copper in the second quarter to just $1.13 from $1.73 a year earlier and well below its guidance of $1.50. The decline was fueled by operational efficiencies, higher gold credits and an uptick in copper sales volumes.
Freeport's outlook for the third quarter, however, suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $1.59 per pound, while still projecting a full-year average of roughly $1.55. Lower expected sales volumes are likely to impact costs in the quarter. The potential impacts of tariffs may lead to further upside to the projected costs. FCX estimates that the tariffs could potentially increase the cost of goods it purchases in the United States by roughly 5%. Higher costs are likely to weigh on the company's margins.
FCX’s Tepid Volume Outlook Points to Challenges Ahead
Freeport’s copper sales volumes increased around 9% year over year in the second quarter to 1,016 million pounds, primarily driven by shipment timing. The company sold 522,000 ounces of gold, reflecting around 45% year-over-year growth. FCX also sold 22 million pounds of molybdenum, up about 4.8% from the year-ago quarter.
Freeport has provided a tepid copper sales volume outlook for the third quarter, which suggests modestly lower volumes on a sequential basis. FCX expects copper sales volumes of 990 million pounds, indicating a 4% year-over-year decline. It has also provided a weaker gold and molybdenum sales volumes guidance of 350,000 ounces and 18 million pounds, respectively, reflecting sequential and year-over-year declines. The lack of growth in volumes may impact the company’s performance.
FCX’s Earnings Estimates Going Up
Freeport’s earnings estimates have been going up over the past 60 days. The Zacks Consensus Estimate for 2025 and 2026 has been revised higher over the same time frame.
The Zacks Consensus Estimate for 2025 earnings is currently pegged at $1.74, suggesting year-over-year growth of 17.6%. Earnings are expected to register roughly 33.8% growth in 2026.
A Look at FCX’s Valuation
FCX is currently trading at a forward price/earnings of 19.52X, a roughly 2% premium to the industry average of 19.13X. The FCX stock is trading at a discount to Southern Copper and a premium to BHP Group.
FCX’s P/E F12M Vs. Industry, SCCO and BHP
Final Thoughts: Hold FCX Stock for Now
FCX is poised to gain from progress in expansion activities that will boost production capacity. Robust financial health allows FCX to invest in growth projects and drive shareholder value. Rising earnings estimates and healthy dividend growth are the other positives. Despite these positives, the recent pullback in copper prices, weaker sales volume outlook and higher expected unit costs warrant caution. Holding onto this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.