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Freeport-McMoRan’s Valuation: Are Risks Adequately Priced In?

Mark O'Hara
Freeport-McMoRan’s Valuation: Are Risks Adequately Priced In?

Freeport-McMoRan (FCX) is valued at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of 4.5x, whereas copper mining peers Antofagasta (ANTO) and Anglo American (AAL-L) have EV-to-EBITDA multiples of 5.5x and 4.7x, respectively, and Southern Copper (SCCO) and Glencore (GLNCY) have multiples of 5.8x and 11.0x. Based on the above 2018 multiples, Freeport appears to be the cheapest among the copper mining stocks we’re covering, while Southern Copper appears to be the most expensive. This year has been an unusual one for Freeport, as it is ending open-pit mining at its Grasberg mine.