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Trefis Has A Price Estimate Of $14 For FCX's Stock
Trefis Stock Price Estimate
Freeport-McMoRan Inc. (FCX) is involved in the mining, smelting, and refining of copper, gold, and molybdenum.The company runs its mining and smelting operations in North and South America and Indonesia.Most of the copper concentrate produced by FCX's mines is cast into copper rod by the company's rod and refining operations.Certain mines also produce molybdenum concentrate, gold, and silver.
We arrive at the stock price estimate for FCX as:
Stock Price = (Total Revenue x Net Income Margin / Shares Outstanding) x P/E Multiple
Trefis Stock Price Estimate
Total Revenue [A]
Net Income Margin [B]
No of Shares [C]
P/E Ratio [D]
Freeport-McMoRan Revenues: How Does Freeport-McMoRan Make Money?Freeport-McMoran Earnings: Performance and 2019 ForecastHow much is FCX expected to add to its copper revenue in the next 5 years?More Trefis Materials Data
Estimating FCX's Total Revenue
For the full year, we expect revenue to decrease by over 21 to $14.7 billion in 2019 from $18.6 billion in 2018, primarily due to decline in volume and lower price realization in the company's copper segment, partially offset by higher gold prices and molybdenum revenue, with an increase in molybdenum prices due to revival in the demand for the product from China.Revenue is expected to increase to $15.5 billion in 2020, mainly due to a positive price outlook for copper and gold, a slight pick-up in volume compared to 2019, and higher copper sales from American mines.Additionally, other revenue (which includes rod and refining revenue, silver sales, etc.) is also expected to remain strong in the near term.
#1. Estimating FCX's Total Revenues:
FCX's Total Revenue has grown by 13.6% in 2018 before declining sharply by 22.7% in 2019. It is expected to grow at a modest rate of 4.5% in 2020 before recovering sharply by 19.6% in 2021
Our Interactive Dashboard Analysis, How Does Freeport-McMoRan Make Money?, Provides An In Depth View Of The Company's Revenues.
Total Revenue (A) = (a+b+c+d-e)
Total Copper Revenue (a)
Gold Revenue (b)
Molybdenum Revenue (c)
Other Revenue (d)
#2. Deriving FCX's Net Income:
Net Income increased from $1.8 billion in 2017 to $2.6 Billion in 2018, before sharply falling to -$0.2 billion in 2019. We expect it to increase to $1.8 billion by 2021
This growth will likely be led by higher margins and elevated revenue level
Net income margin witnessed a significant decline from 14% in 2018 to -1.7% in 2019, mainly due to higher cost per unit (as shipments would decrease) and the absence of any gain on asset sales, unlike in 2018. Margins could see a slight revival by reaching about 4% in 2020, due to a pick up in volume sold and higher revenue.
Net Income (A x B)
Total Revenue (A)
Net Income Margin (B)
#3. Determining FCX's EPS:
EPS has grown from $1.25 in 2017 to $1.78 in 2018, before dropping to -$0.16 in 2019. We estimate it to be $0.42 and $1.24 in 2020 and 2021, respectively
EPS growth in 2020 and 2021 can be attributed to higher Net Income and an almost stable share count.
EPS (A / B)
Net Income (A)
No of Shares (B)
#4. Estimating FCX's Share Price:
Our Price Estimate of $14 For FCX's Stock is based on our Detailed Valuation Model, and implies a 33.8x P/E Multiple on expected 2020 EPS of $0.42
Trefis Stock Price Estimate (A * B)
P/E Ratio (B)
Comparing FCX's Historical P/E Multiple With That of Its Peers
P/E Multiples are based on Share Price at the end of December 2019, and reported (or expected) Adjusted Earnings for the full year
Note: 2019 P/E for FCX is as at the end of Q3 2019, as the company made loss for full year 2019. Barrick Gold's 2018 P/E is not defined due to loss reported for the year
Freeport-McMoRan P/E Multiple
Newmont-Goldcorp P/E Multiple
Barrick Gold P/E Multiple
Our Complete Set Of Analyses On Freeport-McMoRan
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Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).
2. How to monitor your scenario vs. actual results
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