Reasonable EV/EBITDA Ratio
Low Price-to-Sales Ratio
Strong Operating Profit Margin
Healthy Return on Equity
Strong Liquidity Ratios
Minimal Debt Levels
🏆 Strong Financial Performance
🌍 Established Market Position
🔋 Growth in Copper Demand
🚀 Significant Organic Growth Opportunities
💡 Innovation and Efficiency Focus
High Price-to-Earnings Ratio
Elevated Price-to-Free Cash Flow Ratio
Net Profit Margin is Low
Cash Ratio is Moderate
⚠️ Geopolitical Risks
📉 Uncertain Regulatory Environment
Freeport-McMoRan demonstrates a solid business model with strong financial performance and established market presence. However, geopolitical risks and regulatory uncertainties in Indonesia pose challenges. The company's focus on organic growth and innovation positions it well for future opportunities.
Analysis Date: January 23, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$50.33
Current Market Price: $28.99
IV/P Ratio: 1.74x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
42.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for FCX
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (22.30)
P/B ratio ≤ 1.5 (2.40)
Current ratio ≥ 2.0 (2.42x)
Long-term debt < Net current assets (0.00x)
Margin of safety (42.0%)
FCX does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
With an operating profit margin of 26.68%, the company demonstrates strong operational efficiency, allowing it to convert a significant portion of revenue into operating profit.
A return on equity of 10.87% indicates that the company is effectively utilizing its equity base to generate profits, which is a positive sign for investors.
The net profit margin of 7.45% is relatively low, which may indicate challenges in profitability after accounting for all expenses, including taxes and interest.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
10.87%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
0.50%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
29.37%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
7.45%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The current ratio of 2.42 and quick ratio of 2.42 indicate that the company has a strong ability to cover its short-term liabilities with its short-term assets, signaling good financial health.
With a debt-to-equity ratio of 0.002 and a debt-to-assets ratio of 0.0007, the company maintains very low levels of debt, reducing financial risk significantly.
A cash ratio of 0.71 suggests that while the company has sufficient cash to cover short-term liabilities, it may not have an excess cushion compared to some benchmarks.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.00x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.42x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
FCX reported an EBITDA of $10 billion for 2024, which is a 14% increase from the previous year. This reflects the company's effective operational execution and improved pricing.
Freeport has a long-standing history in Indonesia and a strong operational presence in the U.S. and South America. This geographic diversification allows it to mitigate risks associated with geopolitical challenges.
The demand for copper is expected to grow due to electrification and infrastructure investments, positioning FCX favorably in a market projected to have significant deficits in the long run.
The company faces ongoing geopolitical risks in Indonesia, which could impact operations and negotiations for export approvals and license extensions.
FCX aims to achieve a run rate of 800 million pounds of incremental copper production by 2030 through various organic growth initiatives, including innovative leaching techniques.
The company is investing in innovation to enhance operational efficiency, reduce costs, and improve production yields, which is crucial for maintaining a competitive edge.
There is uncertainty regarding export regulations in Indonesia, which could affect production rates and operational planning.