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Freeport-McMoRan Surges 25% YTD: Buy, Sell or Hold the Stock?
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Key Takeaways
Freeport's Q1 earnings benefited from a 30% rise in realized copper prices to $5.78 per pound.
Freeport benefits from expansion projects and solid cash flow, supporting growth and shareholder returns.
FCX faces pressure from higher unit costs and weaker sales volumes tied to operational disruptions.
Freeport-McMoRan Inc.’s (FCX - Free Report) shares have gained 24.8% so far this year, fueled by strong earnings backed by higher copper prices amid concerns over tighter global supply and resilient demand. While sales volumes were lower, significantly higher realized copper prices boosted the company’s first-quarter earnings performance.
Freeport has outperformed the Zacks Mining - Non Ferrous industry’s rise of 9.5% and the S&P 500’s increase of 8.1% over the same period. Its peers, Southern Copper Corporation (SCCO - Free Report) and BHP Group Limited (BHP - Free Report) , have rallied 20.6% and 37%, respectively.
Freeport’s YTD Price Performance
Image Source: Zacks Investment Research
FCX stock slipped below its 50-day simple moving average (SMA) last Friday, pulled down by a retreat in copper prices. FCX has been trading above the 200-day SMA since late November 2025, suggesting a long-term uptrend. Following a golden crossover on July 8, 2025, the 50-day SMA is 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 analyze the stock better.
Freeport’s Growth Actions to Drive Capacity & Production
Freeport continues to leverage its portfolio of high-quality copper assets, emphasizing disciplined execution and organic growth initiatives to strengthen its production profile. It has completed the evaluation of 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, with an estimated resource of approximately 20 billion recoverable pounds of copper.
In Arizona, FCX is progressing with pre-feasibility studies at its Safford/Lone Star operations, with completion targeted for 2026, to assess a sizable sulfide expansion opportunity. It has expansion opportunities at Bagdad in Arizona that can more than double the concentrator capacity of the operation. Technical and economic studies have revealed the potential to build concentrating facilities to boost copper production by 200-250 million pounds annually.
PT Freeport Indonesia (PT-FI) is developing the Kucing Liar ore body within the Grasberg district with a targeted ramp-up to commence in 2030. FCX completed studies in 2025 that showed an opportunity to increase Kucing Liar’s design capacity to 130,000 metric tons of ore per day and reserves by roughly 20% at low costs.
FCX’s Solid Financial Health & Capital Discipline Bode Well
FCX has a strong liquidity profile and generates substantial cash flows, providing ample flexibility to fund expansion projects, reduce debt and enhance shareholder returns. It generated solid operating cash flows of $5.6 billion in 2025. Cash flows provided by operations surged 36% year over year to around $1.5 billion in the first quarter of 2026. Freeport ended the first quarter with strong liquidity, including $3.7 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 first quarter, Freeport had a net debt of $2.4 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 its 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 22.1% compared with 36.3% for Southern Copper and 29.3% for BHP Group.
FCX offers a dividend yield of roughly 0.5% at the current stock price. Its payout ratio is 14% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong financial health, the company's dividend is perceived to be safe and reliable.
Elevated Copper Prices Augur Well for Freeport
Prices of copper, the backbone of electrification, were volatile yet mostly favorable last year due to global economic and trade uncertainties. Copper prices started 2026 on a strong note, underpinned by robust demand from China and the United States. Structural tailwinds, including electric vehicles (EVs), renewable energy projects, data center growth and grid modernization, continue to boost copper consumption. Worries about tightening supply amid rising EV and infrastructure demand also supported the red metal. These factors led to prices surging to roughly $6.4 per pound in late January. Prices of the red metal were mostly volatile during February, largely trading near $6 per pound.
Copper prices came under pressure in March amid concerns about the impact of surging oil prices on the global economy due to the war in the Middle East, dragging down prices to a three-month low of around $5.3 per pound in late March. Prices rebounded in April on hopes of a de-escalation in the Iran war. Prices shot up to around $6.6 per pound in May amid robust demand in China and supply worries linked to the Middle East conflict. Copper surged to an all-time high near $6.7 per pound recently on supply woes. Prices have pulled back from that level and are currently hovering near $6.3 per pound. Inflation concerns stemming from an uptick in oil prices amid tensions in the Middle East and a strengthening dollar pressured the prices of the red metal.
Freeport’s average realized copper price climbed around 30% year over year to $5.78 per pound in the first quarter. Favorable prices are expected to continue to support its performance.
Higher Unit Costs May Pressure FCX’s Margins
Freeport faces headwinds from higher costs. Its outlook for the second quarter of 2026 suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $2.24 per pound, while projecting a full-year average of roughly $1.95 (compared with $1.65 in 2025). The projected second-quarter unit cost reflects a roughly 98% year over year and 17% increase from the prior quarter. The uptick in costs reflects higher costs of energy and other consumables due to the Middle East conflict and persistent pressure on volumes. Higher costs are expected to weigh on the company's margins.
Volume Weakness a Drag on FCX’s Prospects
Freeport’s copper sales volumes tumbled approximately 25% year over year in the first quarter to 657 million pounds, and fell from 709 million pounds in the prior quarter. The downside primarily resulted from lower operating rates due to the temporary suspension of operations since the mud rush incident at the Grasberg Block Cave mine in Indonesia in September 2025.
While the company’s outlook for copper sales volumes for the second quarter of 2026 of 690 million pounds indicates a sequential improvement, it still suggests a 32% year-over-year decline. For full-year 2026, consolidated sales volume projections were revised lower to around 3.1 billion pounds of copper from the prior view of 3.4 billion pounds due to an expected delay in achieving full ramp-up of the Grasberg Block Cave mine. Lower sales volumes are expected to weigh on its top line.
FCX’s Earnings Estimates Northbound
Freeport’s earnings estimates have been going up over the past 60 days. The Zacks Consensus Estimate for earnings for 2026 and 2027 has been revised higher over the same time frame.
Image Source: Zacks Investment Research
A Look At FCX’s Valuation
FCX is currently trading at a forward price/earnings of 21.53X, a 1.5% premium to the industry average of 21.22X. The FCX stock is trading at a discount to Southern Copper and at a premium to BHP Group.
FCX’s P/E F12M Vs. Industry, SCCO and BHP
Image Source: Zacks Investment Research
How Should Investors Play FCX Stock?
Freeport is well-positioned to gain from advances in its expansion projects, which are expected to enhance production capacity. The company’s strong balance sheet provides ample flexibility to fund growth initiatives while maintaining shareholder returns. Favorable copper prices also bode well for its prospects. However, weaker sales volume expectations and higher unit costs remain concerns. Investors already owning this Zacks Rank #3 (Hold) stock may consider staying invested.
View the Zacks #1 Rank List
Image: Bigstock
Freeport-McMoRan Surges 25% YTD: Buy, Sell or Hold the Stock?
Key Takeaways
Freeport-McMoRan Inc.’s (FCX - Free Report) shares have gained 24.8% so far this year, fueled by strong earnings backed by higher copper prices amid concerns over tighter global supply and resilient demand. While sales volumes were lower, significantly higher realized copper prices boosted the company’s first-quarter earnings performance.
Freeport has outperformed the Zacks Mining - Non Ferrous industry’s rise of 9.5% and the S&P 500’s increase of 8.1% over the same period. Its peers, Southern Copper Corporation (SCCO - Free Report) and BHP Group Limited (BHP - Free Report) , have rallied 20.6% and 37%, respectively.
Freeport’s YTD Price Performance
FCX stock slipped below its 50-day simple moving average (SMA) last Friday, pulled down by a retreat in copper prices. FCX has been trading above the 200-day SMA since late November 2025, suggesting a long-term uptrend. Following a golden crossover on July 8, 2025, the 50-day SMA is 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 analyze the stock better.
Freeport’s Growth Actions to Drive Capacity & Production
Freeport continues to leverage its portfolio of high-quality copper assets, emphasizing disciplined execution and organic growth initiatives to strengthen its production profile. It has completed the evaluation of 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, with an estimated resource of approximately 20 billion recoverable pounds of copper.
In Arizona, FCX is progressing with pre-feasibility studies at its Safford/Lone Star operations, with completion targeted for 2026, to assess a sizable sulfide expansion opportunity. It has expansion opportunities at Bagdad in Arizona that can more than double the concentrator capacity of the operation. Technical and economic studies have revealed the potential to build concentrating facilities to boost copper production by 200-250 million pounds annually.
PT Freeport Indonesia (PT-FI) is developing the Kucing Liar ore body within the Grasberg district with a targeted ramp-up to commence in 2030. FCX completed studies in 2025 that showed an opportunity to increase Kucing Liar’s design capacity to 130,000 metric tons of ore per day and reserves by roughly 20% at low costs.
FCX’s Solid Financial Health & Capital Discipline Bode Well
FCX has a strong liquidity profile and generates substantial cash flows, providing ample flexibility to fund expansion projects, reduce debt and enhance shareholder returns. It generated solid operating cash flows of $5.6 billion in 2025. Cash flows provided by operations surged 36% year over year to around $1.5 billion in the first quarter of 2026. Freeport ended the first quarter with strong liquidity, including $3.7 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 first quarter, Freeport had a net debt of $2.4 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 its 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 22.1% compared with 36.3% for Southern Copper and 29.3% for BHP Group.
FCX offers a dividend yield of roughly 0.5% at the current stock price. Its payout ratio is 14% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong financial health, the company's dividend is perceived to be safe and reliable.
Elevated Copper Prices Augur Well for Freeport
Prices of copper, the backbone of electrification, were volatile yet mostly favorable last year due to global economic and trade uncertainties. Copper prices started 2026 on a strong note, underpinned by robust demand from China and the United States. Structural tailwinds, including electric vehicles (EVs), renewable energy projects, data center growth and grid modernization, continue to boost copper consumption. Worries about tightening supply amid rising EV and infrastructure demand also supported the red metal. These factors led to prices surging to roughly $6.4 per pound in late January. Prices of the red metal were mostly volatile during February, largely trading near $6 per pound.
Copper prices came under pressure in March amid concerns about the impact of surging oil prices on the global economy due to the war in the Middle East, dragging down prices to a three-month low of around $5.3 per pound in late March. Prices rebounded in April on hopes of a de-escalation in the Iran war. Prices shot up to around $6.6 per pound in May amid robust demand in China and supply worries linked to the Middle East conflict. Copper surged to an all-time high near $6.7 per pound recently on supply woes. Prices have pulled back from that level and are currently hovering near $6.3 per pound. Inflation concerns stemming from an uptick in oil prices amid tensions in the Middle East and a strengthening dollar pressured the prices of the red metal.
Freeport’s average realized copper price climbed around 30% year over year to $5.78 per pound in the first quarter. Favorable prices are expected to continue to support its performance.
Higher Unit Costs May Pressure FCX’s Margins
Freeport faces headwinds from higher costs. Its outlook for the second quarter of 2026 suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $2.24 per pound, while projecting a full-year average of roughly $1.95 (compared with $1.65 in 2025). The projected second-quarter unit cost reflects a roughly 98% year over year and 17% increase from the prior quarter. The uptick in costs reflects higher costs of energy and other consumables due to the Middle East conflict and persistent pressure on volumes. Higher costs are expected to weigh on the company's margins.
Volume Weakness a Drag on FCX’s Prospects
Freeport’s copper sales volumes tumbled approximately 25% year over year in the first quarter to 657 million pounds, and fell from 709 million pounds in the prior quarter. The downside primarily resulted from lower operating rates due to the temporary suspension of operations since the mud rush incident at the Grasberg Block Cave mine in Indonesia in September 2025.
While the company’s outlook for copper sales volumes for the second quarter of 2026 of 690 million pounds indicates a sequential improvement, it still suggests a 32% year-over-year decline. For full-year 2026, consolidated sales volume projections were revised lower to around 3.1 billion pounds of copper from the prior view of 3.4 billion pounds due to an expected delay in achieving full ramp-up of the Grasberg Block Cave mine. Lower sales volumes are expected to weigh on its top line.
FCX’s Earnings Estimates Northbound
Freeport’s earnings estimates have been going up over the past 60 days. The Zacks Consensus Estimate for earnings for 2026 and 2027 has been revised higher over the same time frame.
A Look At FCX’s Valuation
FCX is currently trading at a forward price/earnings of 21.53X, a 1.5% premium to the industry average of 21.22X. The FCX stock is trading at a discount to Southern Copper and at a premium to BHP Group.
FCX’s P/E F12M Vs. Industry, SCCO and BHP
How Should Investors Play FCX Stock?
Freeport is well-positioned to gain from advances in its expansion projects, which are expected to enhance production capacity. The company’s strong balance sheet provides ample flexibility to fund growth initiatives while maintaining shareholder returns. Favorable copper prices also bode well for its prospects. However, weaker sales volume expectations and higher unit costs remain concerns. Investors already owning this Zacks Rank #3 (Hold) stock may consider staying invested.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.