|Bid||12.95 x 28000|
|Ask||12.99 x 27000|
|Day's Range||12.78 - 13.07|
|52 Week Range||4.82 - 13.64|
|Beta (5Y Monthly)||2.26|
|PE Ratio (TTM)||N/A|
|Earnings Date||Jul 23, 2020|
|Forward Dividend & Yield||0.20 (3.48%)|
|Ex-Dividend Date||Jan 14, 2020|
|1y Target Est||13.26|
Upbeat Q2 views, bright prospects from key growth projects and rising copper prices are driving Freeport's (FCX) shares.
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Does Freeport-McMoRan (FCX) have what it takes to be a top stock pick for momentum investors? Let's find out.
Freeport (FCX) expects copper sales to exceed its April 2020 estimate of 690 million pounds by around 8% in Q2.
(Bloomberg) -- The world’s biggest publicly traded copper company is navigating the pandemic better than it thought.Freeport-McMoRan Inc. expects to report about 8% more copper sales volume and 10% more gold in the second quarter than it forecast in April when it was first coming to grips with the implications of the coronavirus. The Phoenix-based company gave the rare update less than three weeks before its earnings release. Shares surged as much as 8.6%, the most in a month.The news is “a decidedly positive pre-announcement,” David Gagliano at BMO Capital Markets wrote to clients, who expects higher volume and lower capex to drive cash generation in the next two years. “Our view remains FCX shares are undervalued.”Mines around the world are attempting to keep their workers safe without forgoing too much output by postponing non-essential activities. In April, Freeport announced revised operating plans focused on cash preservation and cost cuts, including a 29% reduction in capital expenses over the year.The company sees preliminary adjusted earnings interest, taxes, depreciation and amortization of $650 million in the quarter, excluding Covid-19 costs and nonrecurring outlays associated with employee layoffs as a result of the virus.Copper has recovered to be back to near where it started the year as Chinese demand rebounds and investors fear a surge of infections in Latin America will constrain supply.(Updates with shares and copper prices)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
DEEP DIVE You might find it strange to associate the word “trendy” with stocks in the industrial, materials and financial sectors. Analysts at investment bank Jefferies have done just that in a report that looks forward through the economic-recovery cycle that started in June.
The big shareholder groups in Freeport-McMoRan Inc. (NYSE:FCX) have power over the company. Large companies usually...
Shares of Freeport-McMoRan Inc. surged 5.2% in premarket trading Monday, after the copper and gold mining company provided upbeat sales guidance for the second quarter. The company said it expects copper sales to exceed previous guidance provided in April of 690 million pounds by approximately 8%, and gold sales are expected to exceed April guidance of 165,000 ounces by about 10%. In April, the company had cut its outlook for sales and production in an effort to mitigate the financial impact of the COVID-19 pandemic. On Monday, the company said its Lone Star project in North America is "substantially" complete, and is on track to produce 200 million pounds of copper per year, starting in the second half of 2020. The company also provided a liquidity update, saying it had not drawn on its $3.5 billion revolving credit facility, and had $9.9 billion in debt and $1.5 billion in cash as of June 30. The stock has lost 12.4% year to date through Thursday, while the S&P 500 has eased 3.1%.
Freeport-McMoRan Inc. (NYSE: FCX) today provided an update on its second quarter operational and financial performance and ongoing response to the COVID-19 pandemic.
Editor's note: This article is part of InvestorPlace.com's Best Stocks for 2020 contest. Eric Fry's pick for the contest is Freeport-McMoRan (NYSE:FCX).When we last discussed Freeport-McMoRan (NYSE:FCX), the novel coronavirus pandemic was in full force, the U.S. stock market was struggling to recover from a wicked 34% drop and copper prices had tumbled to a three-year low.This toxic cocktail hammered Freeport's share price from a February high near $13 to a March low below $5. That moment offered plenty of cause for concern … but not for all-out panic.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs I stated at the time:Yes, the coronavirus epidemic will depress economic activity short term, which will depress copper demand short term…Despite that frightening prospect, I expect FCX stock to recover and deliver a solid gain for 2020…Freeport's decimated share price discounts most of [the risks]. It does not price in any potential upside.The biggest potential kicker for the stock is probably just one word: normal. If the copper market simply returned to something resembling normal, Freeport's share price could double fairly quickly from current levels.Well, that is exactly what happened.Thanks to a rebounding copper price, FCX stock has more than doubled from its March lows. Now, it's drawing close to its highs for the year.At current copper prices around $2.70 a pound, Freeport-McMoRan is on track to generate nearly $6 billion in gross profit (EBITDA) over the next 12 months.That level of profitability would produce annual earnings of about $1.10 a share, which would mean that the stock is trading for just 10 times earnings. That expectation assumes no additional rise in the prices of copper or gold.But that's not my assumption.I expect copper prices to continue trending higher toward $3 a pound and gold prices to top $2,000 an ounce on their way to $3,000.At $3 copper and $2,000 gold, Freeport's annual EBITDA could approach $7.5 billion.But that's not all…The company's massive investments to increase production at its Grasberg mine in Indonesia are just starting to bear fruit. As a result, company-wide annual copper production should jump about 40% over the next two years to 4.2 billion pounds. At the same time, gold production should double to 1.8 million ounces.Source: Chart by InvestorPlace Those hefty production numbers could produce EBITDA well over $10 billion and earnings per share (EPS) in the range of $2.Risks remain, of course. The recovering global economy could sputter once again, especially if the second wave of the Covid-19 epidemic in the United States continues to gain traction.But as I pointed out in my previous update, powerful long-term demand trends are likely to push the copper price much higher than it is today. Rising Demand to the RescueDemand from the electric vehicle (EV) and battery industries, for example, could ramp up total global demand for the metal by 900% over the next eight years, according to Robert Friedland, founder and CEO of Ivanhoe Mines (OTCMKTS:IVPAF), which owns the world's largest undeveloped copper mine.Global copper demand is ramping up already, especially from China, the world's largest consumer of the red metal.As a result, global copper inventories have been dropping sharply and are now far below the five-year average levels for this time of year.Source: Chart by InvestorPlace Meanwhile, on the supply side of the ledger, Covid-19 continues to toss boulders in the path of progress.Around the world, the pandemic has disrupted production at more than 50 copper mines. And BMO Capital Markets analyst Colin Hamilton believes that as much as 6.6% of the global copper supply is at risk of disruption throughout the rest of this year.His forecast drops to 5% in 2021. But that is still a significant number in a market that was in a supply deficit as recently as a few months ago.In Chile, the source of more than one-quarter of the world's copper production, the coronavirus is forcing mining companies to run skeleton crews and adopt other measures to operate as safely as possible.While necessary, these measures will almost certainly take a bite out of production. Furthermore, because these mines are also deferring maintenance, they may have to shut down for longer-than-usual periods later this year and early next."The disruptions to copper concentrate mining due to Covid-19 will be felt by Chinese smelters until at least the third quarter," predicts Zhu Yi, an analyst at Bloomberg Intelligence. Best Stocks: Don't Count FCX Stock Out YetThe coronavirus-constrained supply of copper, coupled with strong resurgent demand, should continue putting upward pressure on the copper price.Bottom line: Freeport-McMoRan's robust snap-back from its March lows is a good start. But there is plenty more where that came from. I'm expecting rising copper and gold prices to propel the stock to $15 and beyond by year-end.Don't count this stock out yet.Eric Fry is an award-winning stock picker with numerous "10-bagger" calls -- in good markets AND bad. How? By finding potent global megatrends… before they take off. And when it comes to bear markets, you'll want to have his "blueprint" in hand before stocks go south. Eric does not own the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Best Stocks for 2020: Freeport-McMoRanas Recent Strength Is Just the Start appeared first on InvestorPlace.
Investing in mining companies can be – quite literally – a gold mine. Metals are big business, and one of the mainstays of the industrial world. But that raises an important question: Which metal to invest in?It’s tempting to stick with the old reliables, gold and silver, the original precious metals, among the earliest forms of money, and to this day still considered stable stores of value. All of that is true. But it doesn’t take into account the expense of exploration and mining. It can take a long time for a gold mine to start turning a profit.There are other metals, however, not as rare as gold, or as high priced, but in some ways more valuable in the economy. Copper is typical of that lot. It has uses in jewelry and currency, or course; even today, a lot of our small change is minted with a high copper content. But it’s more important in industry. Everything wires depends on copper, which is the most cost-efficient electric conductor out there, and the most common metal used in the manufacture of electric wiring.This makes copper mines almost as good as gold. Copper is more plentiful – it is sold by the pound, rather than the ounce – and its necessity ensures a ready market. And, the metal is rarely found in isolation. Copper miners routinely extract other metals from the mines, notably zinc, silver, and, yes, gold. Bearing this in mind, we used TipRanks’ database to pinpoint three Buy-rated copper mining stocks that have earned a thumbs up from members of the analyst community. Not to mention each boasts substantial upside potential of over 40%.Western Copper Corporation (WRN)Western Copper is the sole operator of the Casino project, a major copper and gold operation in Canada’s Yukon territory. The mine, which is currently in process of being opened, has an estimated lifetime of 22 to 25 years, and proven recoverable reserves of 4.5 billion pounds of copper an 8.9 million ounces of gold.Casino is a major asset, and Western has used the mine’s potential to raise capital. Earlier this month, the company closed out a successful stock offering of 4 million common shares, which brought in $3.28 million.Roth Capital analyst Jake Sekelsky sees potential in Casino, especially as a magnet for attracting business partners. The scope of the project, in his view, likely exceeds Western’s current capital – but the metals prices are going up. Sekelsky writes, “Casino is a large-scale copper-gold project that we believe could attract a joint-venture partner in a rising price environment. Given the scarcity of projects Casino's size and development stage, we believe a rising metals price environment may spark M&A activity…”Western Copper is a penny stock – but that doesn’t mean it hasn’t got upside potential. Sekelsky rates WRN a Buy and sets a $2.10 price target, suggestive of a 154% upside potential for the coming year. (To watch Sekelsky's track record, click here)Western Copper has two recent analyst reviews, and both agree: this is a stock to buy, and one with high potential. The average price target is $1.95, implying a one-year upside of 136%. Shares are currently priced at 82 cents. (See WRN stock analysis on TipRanks)Teck Resources, Ltd. (TECK)Next up is Teck Resources, a major company with operations in Canada, the US, Peru, and Chile. The company mines copper, zinc, and gold, as well as metallurgical coal – a vital product in the production of steel. Teck’s diversified operations provide some insulation against market downturns in particular metals.Teck’s largest current operation is Highland Valley, a copper-molybdenum mine in British Columbia. The mine has an average production of 160,000 tonnes of metal per year, and is expected to maintain that through 2023. Production is expected to decline after that date, to 150,000 tonnes annually, through 2027, the projected lifetime of the mine.Other major copper mines are in Chile and Peru. Chile is well-known as one of the world’s major copper producers; Peru is a power in mining, with resources throughout the Andes. On May 27, Teck announced that its Antamina copper mine in Peru was resuming operations after a shutdown due to COVID-19.Writing for CIBC, analyst Oscar Cabrera says, “We expect the company’s cost saving and operating efficiency initiatives and strong liquidity to support TECK’s financial flexibility in a challenging macro environment. We believe strong operating execution and the ability to adjust production to changing market conditions while maintaining (or improving) cash returns to shareholders will be key to re-rate TECK’s shares vs. its large mining diversified peers.”Cabrera rates TECK shares a Buy. His price target, at $15.40, implies a 53% upside potential for the stock. (To watch Cabrera’s track record, click here)TECK gets a Strong Buy from Wall Street’s analyst consensus, with 7 Buy reviews and 2 Holds on record. The stock is selling for $10.04, and the $14.19 average price target implies a healthy upside of 40%. (See Teck stock analysis on TipRanks)Freeport-McMoran (FCX)Last up, Arizona-based Freeport is a major mining company with operations in North and South America as well as the Indonesian archipelago. Most of the company’s operations produce copper; molybdenum and gold are also extracted. Freeport boasts a $15.7 billion market cap, and in the market’s rally has seen its shares bounce 100% from their trough value.Which isn’t to say that the coronavirus quarter wasn’t tough on Freeport. Earnings turned sharply negative, and are expected to only partially recover in Q2. Freeport reports a ~400 million pound reduction in copper sales due to the COVID-19 pandemic, and to compensate has announced a $1.3 billion cut in operating expenditures, and $800 million cut in capex, and a $100 million cut in administrative expenses.The aim of those cuts is twofold: to maintain the company’s ability to generate cash, and to maintain a strong liquidity position. While the company’s cash on hand is down 43% year-over-year, Freeport still has available some $1.6 billion in cash and cash equivalents. Looking forward, the company is expecting 3.1 billion pounds of copper production this year, as well as a modest increase in gold production from 775K to 780K ounces.Lucas Pipes, of B. Riley FBR, is impressed by FCX’s actions. He writes, “In our opinion, the costcutting measures FCX put in place were very impressive and the primary reason for the positive reaction to the release by investors... As a result of these measures, the company expects to be FCF-positive for the remaining nine months of the year, a remarkable achievement considering the decline in spot copper prices and the fact that 2020 continues to be a transition year for the company.”Pipes gives FCX a $19 price target, implying a robust upside potential of 76% and fully supporting his Buy rating on the stock. (To watch Pipes’ track record, click here)This is another Strong Buy stock, with 10 Buys and only 3 Holds from the analyst consensus. FCX shares are selling for $10.89, and the $12.50 average price target suggests an upside of 18% for the next 12 months. (See Freeport’s stock analysis at TipRanks)To find good ideas for precious metal stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Chile´s state-run Codelco said on Monday it would implement new measures at its El Teniente copper mine, the company´s largest deposit, to maintain operations amid increasing worker angst over the fast-spreading coronavirus. The world´s top copper producer said it would move to a 14-day on, 14-day off shift schedule at El Teniente, and that it would begin to test workers three times per shift for COVID-19. The "extraordinary measures" would allow it to "ensure the continuity of operations and the contribution of El Teniente to the country," the company said in a statement.
Freeport Indonesia, operator of Grasberg, the world’s second-biggest copper mine, is on track shift to all-underground mining by 2022, its chief executive said on Sunday. Wenas said Freeport had returned to its normal production levels and would be producing 110,000 tonnes of ore per day for 2020. This will rise to 160,000 daily tonnes of ore for 2021 and 200,000 tonnes for 2022, as the firm completes its transition to underground mining, he said.
Unionized copper mine workers in Chile asked on Wednesday to be included in a dialogue between companies and the government to address the exploding coronavirus crisis in the world´s top producer of the red metal. The Chilean Mines Federation - which groups the workers at Chile's principal copper deposits - has softened its tone since demanding on Sunday that authorities strengthen enforcement of safety rules following an "alarming" increase in coronavirus cases among miners. "We want to request, as the largest mining organization in Chile, a three-way dialogue ... to prevent even more mine workers from becoming infected," the group said in a statement.
Copper Mark, a traceability system launched by the International Copper Association (ICA), expected more members this year after two units of mining giant Rio Tinto joined in May. Copper Mark was launched in April 2019 as part of ICA's effort to bring the whole copper supply chain in par with the rising standards and expectations for responsible copper production. It welcomed Oyu Tolgoi LLC in Mongolia and Kennecott Utah Copper LLC in the United States, both owned by Rio Tinto, and expected members of the ICA to be among the early adopters, said Michele Brulhart, its executive director.
A Chilean regulator on Tuesday dismissed the concerns voiced by union workers that mining companies were failing to enforce sanitary measures to combat the spread of the coronavirus, calling mine adherence to the restrictions "adequate." "We have verified on the ground an adequate implementation by the industry and its workers of ... the respective protocols," the agency said in the statement. Chile, unlike neighboring Peru, has yet to require mines to limit operations, even as the number of cases nationwide has soared.
Downbeat news from the Federal Reserve and Johns Hopkins University shook confidence in stocks Thursday. Industrial metals companies are looking especially hard-hit, with shares of copper producer Freeport-McMoRan (NYSE: FCX) off 11.6% in 1 p.m. EDT trading, aluminum giant Alcoa (NYSE: AA) down 14.7%, and U.S. Steel (NYSE: X) suffering worst of all -- down 16%. The stock market is melting down today.
(Bloomberg Opinion) -- Copper has been on a steady upward trend, charging into a bull market and toward $6,000 per metric ton. That’s going to be tough to sustain. China’s stimulus efforts are being felt most strongly in infrastructure and construction. They have been less marked in other metal-intensive corners of the market: consumer goods and exports, which are still waiting for Europe and the U.S. to rally. Meanwhile, disruptions to supply from Latin America’s unfolding coronavirus disaster haven’t been enough yet to offset annualized demand loss. What happens next will be determined by whether Chile, Peru and producers like Indonesia, home to the world’s second-largest copper mine, can do better at controlling the epidemic than resource-rich Brazil.An economic bellwether, copper crumpled earlier this year as the scale of the pandemic became clear, falling by late March to its lowest levels since late 2016. The metal has clawed most of that back and with no large market surpluses in sight, Goldman Sachs Group Inc. is among brokers that have raised price forecasts. The comeback has been largely driven by China, which consumes half the world’s copper and has been steadily eating through stockpiles as industrial production restarts and building resumes. There’s plenty of encouraging evidence: Inventories, after soaring when the pandemic began, have tumbled back. Cancelled warrants, which represent metal earmarked for delivery and so suggest appetite for the physical commodity, have shot up since late May. Hiccups in mine activity are lending support. Shipments from Peru, which has seen perhaps the longest lockdown among top producers, are down by almost a fifth so far this year, according to UBS Group AG. Add in Covid- and price-related closures, project slowdowns and cuts to spending budgets, and the combination is telegraphing tight supply. Enthusiasm is visible among previously bearish money managers, who are turning bullish and adding to long positions.Is all of that enough to keep copper running high? Not necessarily. While consultancy Wood Mackenzie Ltd. estimates 2020 refined production will be down more than 1%, it expects refined consumption to contract by over 3%. The shape of China’s stimulus and recovery offers one reason for caution, as the effects of pent-up demand begin to fade. Take grid spending, usually a major driver of copper demand: After a contraction at the start of the year, investment has increased and the budget is expected to expand from a year earlier. Yet the emphasis is on ultra-high voltage electricity lines to cover long distances, which tend to use lighter aluminum. Production of consumer appliances like air conditioners is also still under pressure. Though better property and auto sales figures are encouraging, there was no significant real estate stimulus out of the recent National People’s Congress meeting. And measures to support the electric vehicle sector and its charging infrastructure may not be enough.More worrying is the weakness in the China’s exports, as seen in the May manufacturing purchasing managers’ index. About 30% of China’s apparent consumption of refined copper is actually exported, according to Cru Group, so extended lockdowns in India and elsewhere matter.It would be foolish to underestimate China’s ability to throw money at the problem. Still, the bigger unknown for the coming weeks is how the coronavirus spreads in copper’s biggest producers. Peru has already seen exports drop but so far Chile, which accounts for about a third of global production, has continued to operate largely unscathed. That was easier when there were fewer cases in the wider population, but now the country is in the grip of a significant outbreak.Brazil, now with the second-highest case number in the world after the U.S., offers a cautionary tale. With case rates rising at and near mines, iron ore producer Vale SA has already been forced to suspend work at one complex, Itabira, and concerns are growing about the country’s north. Near its Carajas operations there, the local town of Parauapebas has 5,734 cases for a population of roughly 200,000.Indonesia is another worry, says Nick Pickens, copper research director at Wood Mackenzie, given the importance of the Freeport-McMoRan Inc.-operated Grasberg mine to additional supply into 2021. Reuters reported last month that the mine was now working with a skeletal team after a rise in coronavirus infections in the area, including in workers’ living quarters. That would add uncertainty further out, not least given the degree to which miners have cut capital expenditure, discretionary spending and care and maintenance, as Cru principal analyst Craig Lang points out. That leaves them less prepared if something goes wrong, and increases the risk of disruption. For now, though, it may take more to feed the bull run.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Indonesian government will ask PT Freeport Indonesia to build a copper smelter in Weda Bay, a newly built metal industrial park in Halmahera, the senior minister overseeing mining said on Friday. "We have proposed to the president, and the president has agreed, to request Freeport to build a smelter in Weda Bay," Luhut Pandjaitan, Coordinating Minister of Maritime and Investment Affairs, told a virtual seminar.