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Freeport-McMoRan (FCX) closed the latest trading day at $49.47, indicating a +0.59% change from the previous session's end. The stock fell short of the S&P 500, which registered a gain of 1.11% for the day. On the other hand, the Dow registered a gain of 0.8%, and the technology-centric Nasdaq increased by 1.24%.

Coming into today, shares of the mining company had gained 23.54% in the past month. In that same time, the Basic Materials sector gained 5.96%, while the S&P 500 gained 0.48%.

The upcoming earnings release of Freeport-McMoRan will be of great interest to investors. The company's earnings report is expected on April 23, 2024. The company's earnings per share (EPS) are projected to be $0.31, reflecting a 40.38% decrease from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $5.64 billion, indicating a 4.67% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $1.51 per share and revenue of $23.72 billion, which would represent changes of -1.95% and +3.76%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Freeport-McMoRan. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.86% lower within the past month. Freeport-McMoRan is holding a Zacks Rank of #3 (Hold) right now.

Looking at valuation, Freeport-McMoRan is presently trading at a Forward P/E ratio of 32.56. This indicates a premium in contrast to its industry's Forward P/E of 16.81.

The Mining – Non Ferrous industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 92, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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The key to long-term North American security has become inextricably tied to critical minerals such as lithium, graphite, nickel, cobalt, copper and rare earths elements.

Without them, there will be no energy transition.

And China dominates the entire playing field.

That dire situation has prompted a host of new legislation in both the United States and Canada—all designed to position North America to shift market share from China.

That situation means that the junior explorers and producers sitting on critical mineral deposits are now forming the backbone of North America’s national security rethink.

Every policy going forward is designed to bolster their operations and non-Chinese investment in those operations.

In November 2022, the Canadian government ordered three Chinese firms to divest from their Canadian mining investments. Then, late last year, the government implemented the Investment Canada Act (ICA) and the Critical Minerals Strategy to reduce Chinese economic influence and reboot investment in critical miners as a measure of national security.

That move left Canadian miner Power Metals Corp (TSXV:PWM,OTC: PWRMF) in control of two key assets: a potentially high-quality lithium mine and what could end up being the only functioning cesium mine in the world that China doesn’t own.

Canada wants new critical minerals, and it wants their development fast-tracked.

In February, Canadian Energy Minister Jonathan Wilkinson told Reuters that Ottawa was focusing on six critical minerals for electric vehicles and wind turbines—lithium, graphite, nickel, cobalt, copper and rare earths elements, and that it planned to boost energy security by significantly reducing the time it takes to develop them.

In fact, Canada is hoping to slash development time by nearly a decade.

And an essential element of the new critical minerals security strategy is to combat China, which has been using its soft power to scoop up strategic critical mineral assets in North America.

The first step was forcing Chinese companies to divest their ownership in Canadian critical minerals.

Power Metals spent the second half of 2023 developing an understanding of the large property and mineral discoveries made at their strategic Case Lake play with airborne geophysical surveys, field-based prospecting and mapping programs.

They’ve also made several additional land acquisitions in 2023 and 2024, with a continued focus in lithium, cesium and tantalum, taking on Winsome Resources as a 19.59% partner.

Power Metals has drilled over 15,000 meters to date and its most recent drilling campaign just launched in late February this year, eyeing Canada’s most critically strategic minerals against the backdrop of the most attractive new investment scenario the sector has ever seen in North America.

Case Lake: China’s Loss, North America’s Gain

Power Metals’ flagship exploration project has been described by the company’s Chairman as a “geologist’s dream” and the equivalent of “prime real estate on Park Avenue”.

Almost every mineral discovery in Canada has been undertaken in the remotest of areas. But unlike most mining venues, Case Lake is accessible year-round, with all infrastructure in place—right down to elusive cell phone signals.

Case Lake is one of the most inexpensive properties to drill in Canada, according to Power Metals.

While the access makes it significantly easier and cheaper, that is only half of the story.

The cesium, lithium, and tantalum intersections here are in pegmatite that is exposed on the surface and running so shallow that it is less than 50 meters deep in various areas.

And the high-grade cesium it holds in its folds is said to be similar to Australia’s famous Sinclair Mine.

That’s why Australian money stepped in when the Canadian government forced the Chinese out.

Australia's first commercial cesium mine, Sinclair, extracted its last cesium in 2019. And it’s one of only three in the world. The other two are the Tanco mine in Manitoba, Canada, and the Bikita mine in Zimbabwe. Tanco shut down after the mine collapsed in 2015, and Bitika was depleted in 2018.

That renders Case Lake a highly strategic property on a national security level.

It also makes Case Lake highly attractive to Western buyers.

Australia’s Winsome Resources (ASX:WR1) which jumped at the chance in November 2022, when they moved to scoop up Chinese mining giant Sinomine Resource Group’s 5.7% stake in Power Metals. Since then, they’ve raised that stake twice—first to 10.7% and more recently to 19.59%.

What the Chinese Were Eyeing

Now everyone knows what the Chinese knew from the beginning: Power Metals’ (TSXV:PWM,OTC: PWRMF) Case Lake property is of significant strategic importance.

The Case Lake Property, in northeastern Ontario, close to the border with Quebec, consists of 585 cell claims in Steele, Case, Scapa, Pliny, Abbotsford and Challies townships, Larder Lake Mining Division.

Covering some 95 square kilometers with 14 granitic domes, the Case Lake pegmatite swarm consists of six spodumene dikes known as the North, Main, South, East and Northeast dikes on the Henry Dome, and the West Joe dike on a new dome. Together, these dikes form mineralization trend that extends for some 10 kilometers.

Between 2017 and 2022, Power Metals drilled a total of 15,700 meters of core at Case Lake.

They were primarily targeting lithium, with new lithium and tantalum discoveries. Its world-class, high-grade lithium discovery of over 4% at shallow, open depth was already making waves and earning Chinese attention prior to 2022.

But while it was drilling for this lithium and tantalum, Power Metals made a surprise discovery of rare cesium at Case Lake’s West Joe Dyke.

This is some of the highest-grade cesium found in decades, with grades as high as 24% over good intervals.

– 24.07% Cesium over 1 meter

– 20.36% Cesium over 1 meter

– 22.22% Cesium over 2 meters

– 7.65% Cesium over 7.09 meters

Those were the results that prompted the Chinese to pounce on Power Metals.

In September last year, Power Metals further boosted is findings with the discovery of new pegmatite dikes in close proximity to Dome Nine, confirming the presence of a 10-15-meter wide spodumene bearing pegmatite strike with Lithium content as high as 1.12%, along with a new pegmatitic tonalite identified just southwest of the West Joe Zone.

Cesium is central to the United States’ goal of winning the 5G race, it plays a key role in aircraft guidance systems, oil and gas drilling, and global positioning satellites.

And despite its importance, all the known cesium deposits around the world have either been depleted, or the mines have been rendered inoperable.

All of this could leave Power Metals and its Case Lake project as one of the most unique and exciting natural resource plays in the world today.

But what the Chinese were eyeing before they were evicted is now an even better story as the 2024 drilling campaign gets underway.

The 2024 Drilling Campaign That Could Boost Canada’s Critical Minerals Power

Power Metals launched its new drill campaign on February 29, deploying a diamond drill rig at its 100% owned Case Lake Property.

The campaign will drill a total of 4,000 meters to delineate and extend Lithium-Cesium-Tantalum (LCT) mineralization along the geological strike and down-dip of Case Lake’s known mineralization.

“We are very excited to be back at Case Lake and look forward to a successful launch of our winter 2024 exploration program. We believe in the exploration upside at Case Lake, one of the few projects in the world that contain Cesium mineralization in Pollucite and look forward to drill test the high priority exploration targets our team have been able to identify,” Power Metals Chairman Johnathan More, said in a press release.

“The current drilling has identified coarse spodumene mineralization between 2cm – 10cm grain size, these zones displayed between 6% – 15 % spodumene mineralization that occur in a series of stacked pegmatites at Main Zone,” the company said.

Last week, drilling moved to West Joe at Case Lake to test mineralization extensions to the high-grade cesium mineralization found during the 2017-2022 drilling.

Results are expected in late April from the first round of assays from the new drilling campaign.

And it’s also acquiring new ground elsewhere, building on its success so far at Case Lake.

On March 19, Power Metals (TSXV:PWM,OTC: PWRMF) staked the Pelletier Project, with 337 mineral claims over a total surface area of 7,000 hectares in northeast Ontario, approximately 50 km south of Hearst.

This is another project characterized by lithium – cesium – tantalum, and previous work on this play completed by geologists from Ontario Geological Survey in 2003 reported evolved granitic pegmatites with anomalous rubidium, cesium, and the potassium to rubidium ratio, indicating the potential for LCT pegmatites.

The new project is also just 30 kilometers south of the Lowther pegmatite field, where Brunswick Exploration conducted exploration drilling at the Decoy and Moskito pegmatites.

China knew the significance of Case Lake, and Australia was quick to step in when the Chinese were evicted.

Australia’s Winsome Resources, which now owns a nearly 20% stake in Power Metals, is a lithium juggernaut, and it’s hedging its bets on Power Metals. Not only did Winsome scoop up the Chinese stake in this Canadian critical metals miner, but it also grabbed the off-take rights to future production.

Global eyes are on this critical project—and not just because of the lithium, tantalum and cesium prospectivity …

The China-Australia scramble for these assets have as much to do with the easy accessibility and treasure trove so close to the surface. That means cheap drilling for lithium and one of the world’s rarest and most critical elements—cesium, which is not mined anywhere else in the world right now.

With a key Australian lithium player now behind Power Metals, and with Winsome now occupying a seat on the Power Metals board, an additional layer of critical minerals expertise is further shoring up the discovery and exploration prowess at one of North America’s most important new discoveries. Late April is poised to bring us the results of the current drilling campaign, and many eyes will be on Power Metals between now and then.

Other companies to keep an eye on:

Compass Minerals International (NYSE: CMP), headquartered in Overland Park, Kansas, remains a leading provider of essential minerals, solidifying its position with consistent performance and strategic growth initiatives. Since the previously mentioned reference, the company has made significant advancements in its operations, product offerings, and sustainability efforts.

One notable development is Compass Minerals' continued focus on innovation in the lithium extraction sector. Recognizing the burgeoning demand for lithium in electric vehicle batteries, the company has accelerated its efforts to extract lithium from its existing operations in Utah. By leveraging its existing infrastructure and expertise in brine extraction, Compass Minerals aims to become a major player in the sustainable lithium market, catering to the needs of the rapidly expanding clean energy industry.

Furthermore, Compass Minerals has expanded its product portfolio by introducing new and innovative solutions. Notably, the company has developed a range of specialty salts for various industrial applications, including pharmaceuticals, food additives, and water treatment. These value-added products have not only strengthened the company's revenue streams but also enhanced its competitive advantage in specialized markets.

Freeport-McMoRan Inc. (NYSE:FCX), a leading mining company based in Phoenix, Arizona, has a global presence with significant reserves of copper, gold, and molybdenum. The company's operations span several countries, including Indonesia, the United States, and South America. With the growing demand for copper in renewable energy and electric vehicle technologies, Freeport-McMoRan is well-positioned to capitalize on the transition towards greener economies.

In addition to its core mining business, Freeport-McMoRan is actively involved in community engagement and environmental stewardship. The company has implemented various initiatives aimed at reducing its environmental footprint and promoting sustainable mining practices. These efforts include water management, biodiversity conservation, and emission reduction strategies. Freeport-McMoRan's commitment to responsible mining ensures compliance with environmental standards while contributing to the broader goal of sustainable development in the regions it operates.

One of Freeport-McMoRan's recent developments is the construction of the Lone Star copper mine in Arizona. The Lone Star mine represents a significant investment and is expected to be a major copper producer for the company. This project underscores Freeport-McMoRan's commitment to meeting the growing demand for copper in various industries, including renewable energy and electric vehicles.

Rio Tinto (NYSE:RIO), a global mining and metals powerhouse, continues to be a formidable player in the industry. Headquartered in the United Kingdom and Australia, the company has a far-reaching global presence spanning approximately 35 countries. Its diverse portfolio encompasses a wide range of commodities, including aluminum, copper, diamonds, coal, iron ore, and uranium. Rio Tinto's impressive asset base is complemented by solid market fundamentals, particularly in the copper and iron ore markets, making it an attractive investment opportunity.

In recent years, Rio Tinto has made significant strides in integrating innovative technologies and sustainable practices into its operations. The company recognizes the urgent need to reduce its carbon footprint and mitigate environmental impacts. To that end, Rio Tinto has invested heavily in renewable energy sources, such as solar and wind power, and has also implemented various measures to rehabilitate mining sites after extraction. This proactive approach to corporate responsibility and sustainability has not only set a benchmark for the mining industry but has also resonated with investors seeking companies aligned with ethical and environmentally conscious practices.

In addition to its ongoing commitment to sustainability, Rio Tinto has also been actively involved in mergers and acquisitions to strengthen its market position. In 2023, the company completed the divestment of its coal assets in Australia, marking a strategic shift towards a more sustainable portfolio. Furthermore, Rio Tinto has expressed interest in exploring opportunities in the battery metals sector, recognizing the growing demand for these materials in the transition to clean energy technologies. These strategic moves underscore Rio Tinto's agility in adapting to shifting market dynamics and its commitment to long-term growth and profitability.

FMC Corporation (NYSE: FMC), headquartered in Philadelphia, Pennsylvania, is a global agricultural sciences company that delivers innovative technology to farmers worldwide. While FMC is not a traditional mining company, its significant stake in lithium, a critical component in rechargeable batteries and other high-tech applications, sets it apart. Lithium is a strategic mineral in the transition to a clean energy future, and FMC's involvement in this sector positions the company for growth in the years to come.

FMC's commitment to innovation and sustainability is commendable. The company's agricultural products, such as crop protection solutions and plant nutrition technologies, contribute to increased crop yield and quality, addressing global food security challenges. In recent years, FMC has benefited from robust demand for its crop protection products, driven by higher commodity prices and strong agricultural market fundamentals.

Looking ahead, FMC is well-positioned to capitalize on several key trends. The growing global population and rising middle class are expected to drive increased demand for food, which will necessitate higher crop yields. Additionally, the transition to sustainable agriculture practices, such as precision farming and the adoption of biological crop protection solutions, presents significant opportunities for FMC. The company's commitment to innovation and sustainability, coupled with its strong product portfolio and geographic reach, make it well-positioned to navigate the challenges and seize the opportunities ahead.

Sociedad Química y Minera de Chile (NYSE:SQM) is a Chilean chemical and mining company that has been in operation for over 100 years. It is one of the world's largest producers of fertilizers, iodine, and lithium. SQM has operations in Chile, Argentina, Brazil, Peru, and the United States.

SQM has been facing several challenges, including falling commodity prices, environmental regulations, and political uncertainty in Chile. However, the company has also made several strategic investments, which have helped to position it for future growth.

One of the most significant recent developments for SQM is the acquisition of the lithium assets of Albemarle Corporation. This acquisition makes SQM the world's largest producer of lithium, a key ingredient in electric vehicle batteries. SQM is also investing in a number of other projects, including the development of a new potash mine in Canada and the expansion of its lithium operations in Chile.

Magna International (TSX: MG) offers a compelling and intricate approach for accessing the burgeoning commodities market, avoiding speculative investments in emerging high-growth stocks that captivate younger generations. Over a decade ago, Magna International displayed remarkable foresight by initiating substantial investments in the battery market when it was still in its nascent stage. Notably, at that time, the advent of electric vehicles as we know them had only recently entered the automotive landscape, with Tesla introducing its groundbreaking vehicle just two years prior.

Magna's strategic investment in batteries has proven remarkably successful. Since its bold and innovative decision, the company has witnessed an impressive surge in its valuation, amounting to tens of billions of dollars. This growth solidifies Magna International's position as a preeminent player in the intensely competitive battery industry.

Westport Fuel Systems Incorporated (TSX: WRPT) is not strictly a resource play, but it is an organization of significance to monitor as alternative fuel sources and novel energy forms gain prominence. This is especially relevant in light of the global transition away from traditional gasoline and diesel-powered vehicles. Although fundamentally a manufacturing company, Westport offers a distinct avenue for gaining exposure to the alternative fuels sector. As a critical producer of components necessary for constructing natural gas and other alternative fuel-powered automobiles, Westport warrants attention within this domain.

Westport Fuel has been consistently making significant strides in the market over the past year, culminating in tangible results. Since May 2020, the company has experienced a remarkable 322% increase in its stock price. With the potential for additional strategic alliances, such as the recent agreement with Amazon to supply natural gas-powered trucks, the stock exhibits promising growth prospects in the coming years.

In the realm of energy, a paradigm shift towards clean and sustainable sources is underway. A notable development in this regard is the increasing involvement of traditional fossil fuel producers in the pursuit of clean energy solutions. One such company is Suncor Energy (NYSE: SU, TSX: SU), a renowned oil producer that has emerged as a frontrunner in the clean energy space.

While many major oil companies have retreated from oil sands production, Suncor has embraced the challenges and opportunities associated with this sector. By focusing on technological advancements and sustainable practices, Suncor has secured a promising long-term outlook. Moreover, the company's current undervaluation relative to its peers presents an attractive investment opportunity.

Beyond its oil operations, Suncor has established a global leadership position in renewable energy innovations. A notable example is the company's recent investment of $300 million in a wind farm located in Alberta. Furthermore, as Canada transitions away from oil dependence, Suncor is well-positioned to capitalize on the country's abundant lithium reserves. The proximity of lithium deposits to Suncor's existing oil sands operations offers significant logistical and economic advantages.

China's rapid economic expansion has led to a significant increase in energy demand. CNOOC Limited (TSX: CNU), a leading oil and gas producer in China, is poised to benefit from this burgeoning demand. As the country's largest offshore crude oil and natural gas producer, CNOOC Limited has a strong foothold in the energy sector. Its strategic position allows it to tap into abundant hydrocarbon resources in China's offshore waters, giving it a competitive advantage. Additionally, the company's extensive infrastructure and expertise in exploration, development, and production enable it to efficiently extract and deliver energy resources to meet the growing needs of the Chinese economy.

Despite its strong position in the energy sector, CNOOC Limited has faced controversy due to geopolitical tensions between China and other countries. Concerns about the company's ties to the Chinese government and its potential role in geopolitical conflicts have raised eyebrows among investors. However, it's important to note that these controversies are largely external factors that do not directly impact the company's operations or financial performance. CNOOC Limited's robust business fundamentals and its strategic focus on meeting China's energy needs make it a compelling investment opportunity.

Boralex Inc. (TSX:BLX) is a leading renewable energy company in Canada, playing a pivotal role in the country's domestic renewable energy boom. The company's main focus is on wind, hydroelectric, thermal, and solar energy sources, providing clean and sustainable power to homes across Canada and other parts of the world, including the United States, France, and the United Kingdom. Boralex's commitment to renewable energy is evident in its various wind, solar, and hydroelectric projects. In Canada, the company operates several wind farms in Quebec, Ontario, and Alberta, generating clean electricity that reduces reliance on fossil fuels.

Boralex's renewable energy push extends beyond Canada, with a significant presence in other countries. In the United States, the company operates wind and solar farms in several states, contributing to the country's transition to cleaner energy sources. Boralex also has a strong presence in France, where it operates wind farms and hydroelectric plants, providing renewable energy to local communities. Additionally, the company has expanded into the United Kingdom, where it operates wind farms and is actively pursuing new renewable energy projects.

By. Michael Kern

IMPORTANT NOTICE AND DISCLAIMER FORWARD LOOKING STATEMENTS.

This publication contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this publication include that the Canadian mining sector will continue to protect its supply of critical minerals without involvement of China; that cesium and other metals will remain as critical minerals will continue as a national security issue for Western countries; that access to rare metals, and in particular cesium, will be essential to gaining technical superiority; that cesium and other rare earth metals will continue to be a critical for use in various technologies, including the 5G cellular and wireless technologies; that cesium will continue to be a critical mineral and considered as matter of national security for Western countries; that Power Metals Corp. (the “Company”) and its all-Western investors will be in control of the only cesium mine that China does not own; that the Company’s properties will be able to commercially produce cesium, lithium, tantalum and other critical minerals; that the Company will be able to finance and operationally establish mines on its properties to viably and commercially extract the critical minerals; that Australian shareholders and investors in the Company will provide development and other expertise to assist the Company; that Winsome Resources will continue to own a significant stake in the Company; that the Company’s property will one day have one of the only potential mines producing cesium; that the Company can finance ongoing operations and development; that the Company can achieve its business plans and objectives as anticipated. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include the development of alternative technologies that do not require the use of metals and resources currently considered as critical; that other resources are utilized in future in favour of rare earth metals such as cesium; that alternative technologies utilize other resources or that cesium, lithium, and tantalum are not utilized; that other companies discover resources of cesium and other battery metals that are more favorable or more easily developed into commercial production that the Company’s property; that the Company’s properties are unable to produce commercial amounts of cesium, lithium, tantalum or other critical metals; that the Company will be unable to finance or operationally establish mines on its properties for commercial extraction of any critical minerals; that the Company’s Australian investors will not be able to provide development and other expertise to meaningful assist the Company; that Winsome Resources may for various reasons divest its stake in the Company in future; that the Company’s properties may fail to develop mines producing cesium; that the Company may be unable to finance its ongoing operations and development; that the business of the Company may be unsuccessful for various reasons. The forward-looking information contained herein is given as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.

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Freeport-McMoRan (FCX) closed the most recent trading day at $47.33, moving +0.66% from the previous trading session. The stock outperformed the S&P 500, which registered a daily loss of 0.2%. At the same time, the Dow lost 0.6%, and the tech-heavy Nasdaq gained 0.11%.

Shares of the mining company witnessed a gain of 23.97% over the previous month, beating the performance of the Basic Materials sector with its gain of 6.88% and the S&P 500's gain of 3.32%.

Market participants will be closely following the financial results of Freeport-McMoRan in its upcoming release. The company's earnings per share (EPS) are projected to be $0.37, reflecting a 28.85% decrease from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $5.64 billion, reflecting a 4.75% rise from the equivalent quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.53 per share and a revenue of $23.61 billion, representing changes of -0.65% and +3.29%, respectively, from the prior year.

Any recent changes to analyst estimates for Freeport-McMoRan should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.41% higher. Freeport-McMoRan is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Freeport-McMoRan is currently trading at a Forward P/E ratio of 30.74. For comparison, its industry has an average Forward P/E of 15.35, which means Freeport-McMoRan is trading at a premium to the group.

The Mining – Non Ferrous industry is part of the Basic Materials sector. With its current Zacks Industry Rank of 96, this industry ranks in the top 39% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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Zacks Investment Research

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Freeport-McMoRan (FCX), which belongs to the Zacks Mining – Non Ferrous industry.

This mining company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 25.22%.

For the last reported quarter, Freeport-McMoRan came out with earnings of $0.27 per share versus the Zacks Consensus Estimate of $0.21 per share, representing a surprise of 28.57%. For the previous quarter, the company was expected to post earnings of $0.32 per share and it actually produced earnings of $0.39 per share, delivering a surprise of 21.88%.

For Freeport-McMoRan, estimates have been trending higher, thanks in part to this earnings surprise history. And when you look at the stock's positive Zacks Earnings ESP (Expected Surprise Prediction), it's a great indicator of a future earnings beat, especially when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Freeport-McMoRan currently has an Earnings ESP of +9.29%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner.

With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss.

Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

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Freeport-McMoRan Inc. (NYSE:FCX) has announced that it will pay a dividend of $0.15 per share on the 1st of May. This means the annual payment will be 1.3% of the current stock price, which is lower than the industry average.

View our latest analysis for Freeport-McMoRan

Freeport-McMoRan's Earnings Easily Cover The Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. Prior to this announcement, Freeport-McMoRan's dividend was only 47% of earnings, however it was paying out 189% of free cash flows. While the company may be more focused on returning cash to shareholders than growing the business at this time, we think that a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.

The next year is set to see EPS grow by 79.4%. Assuming the dividend continues along recent trends, we think the payout ratio could be 22% by next year, which is in a pretty sustainable range.

historic-dividendDividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2014, the dividend has gone from $1.25 total annually to $0.60. Doing the maths, this is a decline of about 7.1% per year. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems.

Dividend Growth Is Doubtful

Dividends have been going in the wrong direction, so we definitely want to see a different trend in the earnings per share. Freeport-McMoRan has seen earnings per share falling at 6.6% per year over the last five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits. Earnings are predicted to grow over the next year, but we would remain cautious until a track record of earnings growth is established.

Freeport-McMoRan's Dividend Doesn't Look Sustainable

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Freeport-McMoRan's payments, as there could be some issues with sustaining them into the future. While Freeport-McMoRan is earning enough to cover the payments, the cash flows are lacking. We would probably look elsewhere for an income investment.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Freeport-McMoRan that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Nvidia’s pivot to copper cables from optical fiber in AI data centers signals a major increase in copper demand ahead.

(Adds Widodo comment; paragraphs 8,9)

JAKARTA, March 28 (Reuters) – Copper miner Freeport Indonesia has warned the Indonesian government that banning exports of copper concentrate in June could lead to a loss of $2 billion in revenues for Jakarta, a company official said on Thursday.

Indonesia's export ban takes effect from June in an effort to force miners to invest in domestic smelting facilities, thus adding value to their products, boosting earnings from exports.

Freeport Indonesia, controlled by mining giant Freeport McMoran, though the Indonesian government is a majority shareholder, has called for the ban to be relaxed as its Gresik smelter would not be operating at full capacity by June.

"If we can't export, state revenues will drop by around $2 billion, based on current prices," media quoted Chief Executive Tony Wenas as saying in remarks confirmed by a company spokesperson.

The comments followed a meeting with President Joko Widodo, at which he was accompanied by Freeport McMoran's chairman Richard Adkerson and incoming chief executive Kathleen L. Quirk.

Wenas reiterated that construction of the Gresik smelter would be complete by May and start operating the following month, reaching full capacity later in 2024.

A spokesperson for Indonesia's mining ministry declined to comment.

At a separate event on Thursday, Widodo told reporters the government targets completion of all negotiations with Freeport by June at the latest.

"We have to finalise the regulation first and then we can finalise the negotiation," he said, referring to a rule on extension of mining permits.

Wenas has previously said Freeport Indonesia would have to cut ore production by 40% this year if the government did not delay the ban.

On Wednesday, Indonesian copper miner Amman Mineral Internasional said it was also negotiating with the government to relax the ban since its smelter would not be ready by May, arguing that the government earns tax revenues from Amman as well as Freeport.

Freeport also raised the matter of extending its mining permit during the meeting, Wenas said.

Widodo and Adkerson met last November to discuss a 10% increase in Indonesia's ownership of Freeport Indonesia and a 20-year extension of its mining permit beyond the current expiry date of 2041. (Reporting by Bernadette Christina Munthe; Additional reporting by Stefanno Sulaiman and Fransiska Nangoy; Writing by Gayatri Suroyo; Editing by Clarence Fernandez)

Indonesia's export ban takes effect from June in an effort to force miners to invest in domestic smelting facilities, thus adding value to their products, boosting earnings from exports.

"If we can't export, state revenues will drop by around $2 billion, based on current prices," media quoted Chief Executive Tony Wenas as saying in remarks confirmed by a company spokesperson.

The comments followed a meeting with President Joko Widodo, at which he was accompanied by Freeport McMoran's chairman Richard Adkerson and incoming chief executive Kathleen L. Quirk.

Wenas reiterated that construction of the Gresik smelter would be complete by May and start operating the following month, reaching full capacity later in 2024.

A spokesperson for Indonesia's mining ministry declined to comment. The president's office did not immediately respond to a Reuters' request for comment.

Wenas has previously said Freeport Indonesia would have to cut ore production by 40% this year if the government did not delay the ban.

Freeport also raised the matter of extending its mining permit during the meeting, Wenas said.

PHOENIX, March 27, 2024–(BUSINESS WIRE)–Freeport-McMoRan Inc. (NYSE: FCX) announced today that its Board of Directors declared cash dividends of $0.15 per share on FCX’s common stock payable on May 1, 2024, to shareholders of record as of April 15, 2024. The declaration includes a base dividend of $0.075 per share and variable dividend of $0.075 per share in accordance with FCX's performance-based payout framework. The payment of dividends is at the discretion of the Board, which will consider FCX's financial results, cash requirements, global economic conditions and other factors it deems relevant.

FREEPORT: Foremost in Copper

FCX is a leading international metals company with the objective of being foremost in copper. Headquartered in Phoenix, Arizona, FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX is one of the world’s largest publicly traded copper producers.

FCX’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; and significant operations in North America and South America, including the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

By supplying responsibly produced copper, FCX is proud to be a positive contributor to the world well beyond its operational boundaries. Additional information about FCX is available on FCX's website at fcx.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240326804098/en/

Contacts

Financial Contact:David P. Joint(504) 582-4203

Media Contact:Linda S. Hayes(602) 366-7824

In the latest market close, Freeport-McMoRan (FCX) reached $40.36, with a -0.15% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily gain of 1.12%. Meanwhile, the Dow experienced a rise of 0.61%, and the technology-dominated Nasdaq saw an increase of 1.54%.

Coming into today, shares of the mining company had gained 7.24% in the past month. In that same time, the Basic Materials sector gained 5.41%, while the S&P 500 gained 2.06%.

The investment community will be closely monitoring the performance of Freeport-McMoRan in its forthcoming earnings report. In that report, analysts expect Freeport-McMoRan to post earnings of $0.36 per share. This would mark a year-over-year decline of 30.77%. Meanwhile, the latest consensus estimate predicts the revenue to be $5.64 billion, indicating a 4.75% increase compared to the same quarter of the previous year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.52 per share and revenue of $23.19 billion, indicating changes of -1.3% and +1.48%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Freeport-McMoRan. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 4.47% higher. As of now, Freeport-McMoRan holds a Zacks Rank of #3 (Hold).

Investors should also note Freeport-McMoRan's current valuation metrics, including its Forward P/E ratio of 26.53. This indicates a premium in contrast to its industry's Forward P/E of 14.56.

The Mining – Non Ferrous industry is part of the Basic Materials sector. Currently, this industry holds a Zacks Industry Rank of 195, positioning it in the bottom 23% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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The latest trading session saw Freeport-McMoRan (FCX) ending at $40.42, denoting a +1.43% adjustment from its last day's close. This move outpaced the S&P 500's daily loss of 0.11%. On the other hand, the Dow registered a gain of 0.12%, and the technology-centric Nasdaq decreased by 0.41%.

Prior to today's trading, shares of the mining company had gained 6.66% over the past month. This has outpaced the Basic Materials sector's gain of 4.98% and the S&P 500's gain of 2.7% in that time.

The investment community will be paying close attention to the earnings performance of Freeport-McMoRan in its upcoming release. On that day, Freeport-McMoRan is projected to report earnings of $0.36 per share, which would represent a year-over-year decline of 30.77%. Meanwhile, our latest consensus estimate is calling for revenue of $5.64 billion, up 4.75% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.52 per share and a revenue of $23.19 billion, indicating changes of -1.3% and +1.48%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Freeport-McMoRan. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 4.47% increase. Right now, Freeport-McMoRan possesses a Zacks Rank of #3 (Hold).

In terms of valuation, Freeport-McMoRan is presently being traded at a Forward P/E ratio of 26.16. This indicates a premium in contrast to its industry's Forward P/E of 14.81.

The Mining – Non Ferrous industry is part of the Basic Materials sector. This industry, currently bearing a Zacks Industry Rank of 210, finds itself in the bottom 17% echelons of all 250+ industries.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Key Insights

Using the 2 Stage Free Cash Flow to Equity, Freeport-McMoRan fair value estimate is US$56.61
Current share price of US$39.81 suggests Freeport-McMoRan is potentially 30% undervalued
Our fair value estimate is 23% higher than Freeport-McMoRan's analyst price target of US$46.21

How far off is Freeport-McMoRan Inc. (NYSE:FCX) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex.

We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.

View our latest analysis for Freeport-McMoRan

What's The Estimated Valuation?

We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.

Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value:

10-year free cash flow (FCF) estimate

	2024	2025	2026	2027	2028	2029	2030	2031	2032	2033
Levered FCF ($, Millions)	US$2.53b	US$4.32b	US$5.00b	US$4.47b	US$5.01b	US$5.15b	US$5.29b	US$5.43b	US$5.57b	US$5.71b
Growth Rate Estimate Source	Analyst x7	Analyst x7	Analyst x4	Analyst x1	Analyst x1	Est @ 2.95%	Est @ 2.75%	Est @ 2.61%	Est @ 2.52%	Est @ 2.45%
Present Value ($, Millions) Discounted @ 7.8%	US$2.3k	US$3.7k	US$4.0k	US$3.3k	US$3.4k	US$3.3k	US$3.1k	US$3.0k	US$2.8k	US$2.7k

("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$32b

The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.8%.

Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = US$5.7b× (1 + 2.3%) ÷ (7.8%– 2.3%) = US$105b

Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$105b÷ ( 1 + 7.8%)10= US$50b

The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$81b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of US$39.8, the company appears a touch undervalued at a 30% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.

dcfImportant Assumptions

The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Freeport-McMoRan as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.8%, which is based on a levered beta of 1.205. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.

SWOT Analysis for Freeport-McMoRan

Strength

Debt is not viewed as a risk.

Weakness

Earnings declined over the past year.

Dividend is low compared to the top 25% of dividend payers in the Metals and Mining market.

Opportunity

Annual earnings are forecast to grow faster than the American market.

Trading below our estimate of fair value by more than 20%.

Threat

Dividends are not covered by cash flow.

Annual revenue is forecast to grow slower than the American market.

Looking Ahead:

Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. DCF models are not the be-all and end-all of investment valuation. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Why is the intrinsic value higher than the current share price? For Freeport-McMoRan, we've compiled three pertinent items you should look at:

Risks: We feel that you should assess the 1 warning sign for Freeport-McMoRan we've flagged before making an investment in the company.

Future Earnings: How does FCX's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.

Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered!

PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here.

(Adds details)

March 6 (Reuters) – Sprott Asset Management has launched a Copper Miners exchange-traded fund (ETF), with Freeport-McMoRan, Antofagasta and Southern Copper Corp as its top holdings by weight, it said on Wednesday.

The fund is the most recent addition to its suite of critical materials-focused ETFs – baskets of securities that can be bought and sold like individual stocks.

It is its second copper mining fund, joining the Sprott Junior Copper Miners ETF (COPJ) launched in February 2023.

"The Sprott Copper Miners ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the Nasdaq Sprott Copper Miners," the company said in a release.

Copper prices are little changed overall this year, held in check by concerns over the property sector in major consumer China.

Helped by a weaker dollar and declining exchange stockpiles, three-month copper on the London Metal Exchange (LME) was up 1% at $8,574 per metric ton by the European midafternoon on Wednesday. (Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Jan Harvey)

The latest trading session saw Freeport-McMoRan (FCX) ending at $38.32, denoting a +1.03% adjustment from its last day's close. The stock exceeded the S&P 500, which registered a loss of 0.12% for the day. Meanwhile, the Dow lost 0.25%, and the Nasdaq, a tech-heavy index, lost 0.41%.

Heading into today, shares of the mining company had lost 5.41% over the past month, lagging the Basic Materials sector's gain of 0.72% and the S&P 500's gain of 4.83% in that time.

Investors will be eagerly watching for the performance of Freeport-McMoRan in its upcoming earnings disclosure. The company is forecasted to report an EPS of $0.36, showcasing a 30.77% downward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $5.64 billion, up 4.75% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.52 per share and a revenue of $23.19 billion, signifying shifts of -1.3% and +1.48%, respectively, from the last year.

Investors might also notice recent changes to analyst estimates for Freeport-McMoRan. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.27% higher. Freeport-McMoRan currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Freeport-McMoRan is presently being traded at a Forward P/E ratio of 24.9. This expresses a premium compared to the average Forward P/E of 14 of its industry.

The Mining – Non Ferrous industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 157, putting it in the bottom 38% of all 250+ industries.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report

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Freeport-McMoRan (FCX) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this mining company have returned -5.4%, compared to the Zacks S&P 500 composite's +4.8% change. During this period, the Zacks Mining – Non Ferrous industry, which Freeport-McMoRan falls in, has lost 4.1%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Revisions to Earnings Estimates

Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For the current quarter, Freeport-McMoRan is expected to post earnings of $0.36 per share, indicating a change of -30.8% from the year-ago quarter. The Zacks Consensus Estimate has changed -4.4% over the last 30 days.

The consensus earnings estimate of $1.52 for the current fiscal year indicates a year-over-year change of -1.3%. This estimate has changed +2.3% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $2.34 indicates a change of +53.7% from what Freeport-McMoRan is expected to report a year ago. Over the past month, the estimate has changed +0.9%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Freeport-McMoRan is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth Forecast

While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

In the case of Freeport-McMoRan, the consensus sales estimate of $5.64 billion for the current quarter points to a year-over-year change of +4.8%. The $23.19 billion and $23.69 billion estimates for the current and next fiscal years indicate changes of +1.5% and +2.2%, respectively.

Last Reported Results and Surprise History

Freeport-McMoRan reported revenues of $5.91 billion in the last reported quarter, representing a year-over-year change of +2.6%. EPS of $0.27 for the same period compares with $0.52 a year ago.

Compared to the Zacks Consensus Estimate of $5.82 billion, the reported revenues represent a surprise of +1.45%. The EPS surprise was +28.57%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.

Valuation

No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Freeport-McMoRan is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom Line

The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Freeport-McMoRan. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

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Insightful analysis of Southern Copper Corp's strengths, including its vast copper reserves and robust production capabilities.
Examination of potential weaknesses, such as dependency on energy prices and supply chain vulnerabilities.
Exploration of opportunities in the context of the global shift towards clean energy and copper's critical role.
Assessment of threats including environmental regulations and market volatility.

On February 29, 2024, Southern Copper Corporation (NYSE:SCCO) filed its annual 10-K report, providing a comprehensive overview of its financial performance and operational strategies. As an integrated producer of copper and other minerals, SCCO operates mining, smelting, and refining facilities in Peru and Mexico. The company's revenue for the fiscal year ended December 31, 2023, totaled $9,895.8 million, a slight decrease from the previous year, primarily due to lower metal prices and sales volumes. Despite this, SCCO managed to increase copper production by 1.8% and molybdenum production by 2.3%. However, net income attributable to SCCO saw an 8.1% decrease, settling at $2,425.2 million. These financial metrics set the stage for a detailed SWOT analysis, providing investors with a clear picture of SCCO's market position and future prospects.

Decoding Southern Copper Corp (SCCO): A Strategic SWOT InsightStrengths

World-Leading Copper Reserves and Production: Southern Copper Corp boasts the largest copper reserves globally, positioning it as a top player in the industry. Its significant scale of operations across Peru and Mexico, as highlighted in the 10-K filing, ensures a steady production of copper, molybdenum, zinc, and silver. In 2023, SCCO's copper mine production increased by 1.8% to 2,008.4 million pounds, demonstrating its robust production capabilities. This strength is not only a testament to the company's resource wealth but also to its operational efficiency and expertise in mining and processing.

Strategic Market Positioning: SCCO's market positioning is strategic, with its operations spread across key geographic locations in The Americas, Europe, and Asia. This diversified market presence helps mitigate regional risks and capitalizes on global demand for copper and other metals. The company's long-standing presence in the industry, since 1952, and its listing on both the New York and Lima Stock Exchanges further reinforce its market credibility and investor confidence.

Weaknesses

Energy and Resource Dependency: SCCO's operations are heavily reliant on fuel, electricity, and water, which constituted approximately 29% of its total production cost in 2023. Fluctuations in energy prices and potential shortages of water supply pose significant risks to the company's cost structure and operational continuity. The 10-K filing acknowledges these vulnerabilities, indicating that any disruptions in the supply of these critical resources could adversely affect production and expansion opportunities.

Supply Chain and Operational Risks: The global shipping industry's current challenges, including port congestion and container shortages, present risks to SCCO's supply chain. The company's reliance on third-party energy resources and potential delays in product transportation could impact sales agreements and operational efficiency. Additionally, the need for political risk insurance, which SCCO does not intend to obtain, could expose the company to unforeseen geopolitical risks.

Opportunities

Increasing Demand for Copper in Clean Energy Transition: The global push towards clean energy and electrification presents a significant opportunity for SCCO, given copper's essential role in these technologies. The company's commitment to responsible production practices and certifications under international standards aligns with the increasing expectations for sustainable copper sourcing. This positions SCCO favorably to capitalize on the growing demand for environmentally responsible copper production.

Expansion and Diversification: SCCO's exploration activities in Argentina, Chile, and Ecuador, as well as its existing operations, offer opportunities for expansion and diversification of its mineral portfolio. The company's ability to leverage its vast reserves and operational expertise could lead to increased production, new market entries, and enhanced revenue streams in the future.

Threats

Market Volatility and Price Sensitivity: SCCO's financial results are susceptible to fluctuations in metal prices and global economic conditions. The 2023 decrease in net sales was influenced by lower copper and zinc prices, highlighting the company's sensitivity to market volatility. Such economic uncertainties and potential downturns could adversely affect demand for SCCO's products and, consequently, its revenue and profitability.

Environmental Regulations and Legal Challenges: The mining industry is subject to stringent environmental regulations, which can impose significant costs and operational constraints. SCCO's operations, particularly in Peru, face stricter environmental rules that could impact the company's ability to operate efficiently. Additionally, the lack of certain types of insurance coverage for environmental damage or hazards could expose SCCO to legal and financial risks.

In conclusion, Southern Copper Corp (NYSE:SCCO) exhibits a strong foundation with its vast copper reserves and strategic market positioning. However, it must navigate the complexities of energy dependency and supply chain risks. Opportunities in the clean energy sector and potential for expansion present promising avenues for growth. Nonetheless, market volatility and stringent environmental regulations pose significant threats that SCCO must address proactively. By leveraging its strengths and addressing its weaknesses, SCCO can capitalize on emerging opportunities while mitigating the impact of potential threats.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

Germany would wreck its economy if it copied Britain and left the EU, the country’s finance minister has claimed.

Christian Lindner said that the EU’s single market is of “utmost importance” for Germany.

In an interview with Bloomberg TV, he said that leaving the EU “would ruin our economy. This is why we have to tell people, OK, you maybe are not in line with government policies but this is no reason for changing the complete system and for changing what our wealth is based on”.

The comments come amid calls for a “Dexit” from the right-wing Alternative for Germany party. The party’s leader, Alice Weidel, has said that Britain was “dead right” to leave the European Union and that Germany could hold its own vote.

Last month, she told the Financial Times: “If a reform [of the EU] isn’t possible, if we fail to rebuild the sovereignty of the EU member states, we should let the people decide, just as Britain did.”

06:14 PM GMTSigning off

Thanks for joining us today. We’ll be back tomorrow morning ahead of the opening of the London Stock Exchange. In the meantime, I’ll leave you with some of our business stories elsewhere on The Telegraph website from this afternoon:

06:10 PM GMTArm bigger than all but three FTSE 100 companies after shares rocket

The British semiconductor champion Arm has eclipsed the value of all but two FTSE 100 companies as shares rallied after it posted booming sales. Matthew Field reports:

Shares in Arm were changing hands for more than $158 on Monday, up 33pc on its closing price on Friday, valuing the business at over $155bn (£123bn).

The jump in its valuation means Arm is now behind only Shell and AstraZeneca in the values of FTSE 100 companies, which are worth £162bn and £147bn respectively.

Arm’s stock has more than doubled so far this year as investors flock to the microchip designer and its value has soared 159pc since the company went public on New York’s NASDAQ exchange in September.

The company’s skyrocketing share price has seen its overall value climb above HSBC, Unilever and BP as investors buy into claims it stands to benefit from a groundswell of interest in artificial intelligence (AI).

Despite efforts from Rishi Sunak to lure the business back to the Square Mile, Arm opted for a bumper New York float which valued the business at around $55bn.

Last week, Arm reported an increase in revenues of 14pc to $824m. Rene Haas, Arm’s chief executive, told investors the company was seeing “strong momentum and tailwinds from all things AI”.

Technology shares in the US have driven the S&P 500 to record highs this year, prompting some analysts to warn of an AI-driven bubble.

Richard Windsor, an independent analyst, said after Arm’s results the company had benefited from comparisons to US rival Nvidia which would continue “as long as the AI bubble does not pop”. Nvidia overtook the value of Amazon on Monday with a price tag of $1.8 trillion.

He added: “The market loves anything that has exposure to the current frenzy.”

The British chip designer’s processors are a global standard – Arm/Bloomberg05:00 PM GMTFootsie closes in the green

The FTSE 100 closed almost unchanged, up 0.01pc, while the FTSE 250 rose 0.74pc.

In the FTSE 100, the biggest riser was Burberry, up 5.07pc, followed by Frasers Group (the Sports Direct owner), up 4.98pc. The biggest faller was Rolls-Royce, down 2.83pc, followed by AstraZeneca, down 2.66pc.

Meanwhile in the FTSE 250, Jupiter Fund Management rose 8.31pc, followed by holiday firm TUI, up 5.65pc. The biggest faller was real estate investment trust Tritax Big Box, down 4pc, followed by investment manager Ashmore, down 3.22pc.

04:55 PM GMTUpper Crust owner buys Australian rival

The railway and airport food company behind Upper Crust has struck a deal to buy an airport bar and restaurant firm in Australia to further expand its global footprint.

SSP has agreed to take over Airport Retail Enterprises for an undisclosed sum.

It will see SSP add 1,500 staff and 62 sites across seven airports.

The deal will give SSP access to four new airports in Australia where it does not already have a presence – Canberra, Gold Coast, Townsville and Mount Isa.

The acquisition is expected to complete by the end of June.

SSP has been operating in Australia since 2007 and already runs 40 sites across seven airports and one railway station.

Patrick Coveney, chief executive of SSP Group, said: “The Asia Pacific region offers a significant opportunity to build returns and drive growth for the group.”

Customers at an Upper Crust in London last month – Hannah McKay/Reuters04:45 PM GMTLosses triple at company behind Zizzi

The owner of Zizzi has reported widened annual losses despite cheering higher sales.

Azzurri Group, which also runs the Coco di Mama food-to-go and Ask Italian chains, revealed that pre-tax losses widened to £16.4m, for the year to July 2 2023 – more than triple the £4.2m losses seen the previous year.

But it notched up a 9pc rise in total turnover to £257.8m, although it did not provide like-for-like figures.

The widened losses follow a hit from rising interest payments on debts after interest rates were hiked over the year, as well as increased investment in the business.

Azzurri said that underlying earnings before interest, tax and exceptional items rose 21pc to £14.3 million, when stripping out the prior year’s boost from the temporary VAT reduction.

Azzurri, which acquired Irish-based Mexican restaurant chain Boojum last June, added that Christmas trading since its year-end had been “exceptional”, with like-for-like sales growth in the “mid-teens”.

It forecast “strong” revenue growth and underlying profitability in the current financial year.

Azzurri said:

The positive trading momentum has continued into the current year with an exceptional performance over the Christmas period.

Overall, we remain confident of delivering another year of revenue and profit growth.

Sales at the owner of Zizzi rose 9pc – Tony Buckingham04:34 PM GMTNext-gen warships will need half the crew of current vessels

The next generation of British frigates will be crewed by as few as 50 sailors amid a recruitment crisis at the Royal Navy, according to defence contractor Babcock. Our industry editor, Matt Oliver, reports:

John Howie, the company’s corporate affairs chief, said technological advances were expected to bring crewing requirements even further down following significant reductions on the most recent vessels.

He said while the Type 31 frigates currently being built for the Navy require a core crew of about 105 sailors, the company believes the next generation – often referred to as Type 32 – should only require half that number.

It comes as the armed forces battle recruitment shortages, with the Navy reportedly considering plans to mothball the amphibious assault ships HMS Albion and HMS Bulwark owing to a lack of personnel.

Continue reading to find out how effectively the Navy is falling short of recruitment target…

Workers look on at HMS Venturer at Babcock International at Rosyth Dockyard, 2023 – Andrew Milligan/PA04:26 PM GMTGlencore to sell off stake in nickel mine amid flood of cheap foreign supplies

Glencore is to halt nickel production at a south Pacific mine after prices for the battery metal were pushed lower by a slowdown in electric vehicle sales and a glut in global supplies. Matt Oliver has the details:

On Monday the FTSE 100 commodities giant said the Koniambo mine and processing operation in New Caledonia, a French island territory between Australia and Fiji, was “unprofitable” and could no longer be sustained.

The company is now seeking to offload its stake in the troubled business, which it acquired as part of a £56bn merger with Xstrata more than a decade ago.

It comes after the price of nickel plunged from a peak of more than $100,000 a ton in 2022 to around just $16,000 a ton more recently, after production of the metal boomed in Indonesia and China.

Prices have also been hit by a slowdown in demand for electric cars.

With the slide causing trouble for New Caledonia’s nickel industry – an important part of the island’s economy – the French government has been trying to convince miners to continue their operations with a rescue package.

It had offered around €200m (£170m) in state support to Koniambo Nickel SAS (KNS), the joint venture in which Glencore owns a 49pc share. French mining group Société Minière du Sud Pacifique (SMSP) owns the rest.

However, Glencore said it had already sunk $4bn (£3bn) into the business and that it would remain unviable even with the French support.

The company said: “The furnaces will remain hot for six months, and the KNS team will support the critical activities required to maintain the integrity of the asset and keep the site secure.

“Glencore is appreciative of the French government’s efforts to revitalise and rescue the nickel industry in New Caledonia. However, even with the proposed assistance, KNS remains an unsustainable operation and Glencore cannot justify continuing to fund losses to the detriment of its shareholders.”

04:15 PM GMTGas supplies at risk of sabotage, warns Europe's biggest producer

Europe’s increased dependence on Norway’s oil and gas has made the country’s energy installations more at risk of attack, the head of one of the agencies charged with securing them said on Monday.

Norway overtook Russia in 2022 as Europe’s biggest supplier of natural gas as Moscow’s invasion of Ukraine upended decades-long energy ties and sent prices soaring.

“I am concerned about dependency, and there is no doubt that Europe has become more dependent on Norwegian gas,” Lars Christian Aamodt, head of the National Security Authority, said in an interview with Reuters.

“As soon as the dependency increases, so will the threat and the risk,” he said.

Mr Aamodt’s agency said European dependency on Norwegian oil and gas could rise further should conflicts in the Middle East disrupt the petroleum market.

In addition, Norwegian oil and gas installations could be hit by “accidents, physical sabotage and destructive cyberattacks”, a separate report from Norwegian authorities said.

Russian surveillance and mapping of Norwegian infrastructure is continuing as “business as usual”, Admiral Nils Andreas Stensoenes, head of the Norwegian Intelligence Service, told Reuters.

03:42 PM GMTMacquarie mulls TalkTalk investment

TalkTalk is in talks to sell a stake in its wholesale division to the Australian bank Macquarie, according to a report.

Sky News said that City sources have revealed that Macquarie was discussing investing £450m into PlatformX, the name for TalkTalk’s wholesale business, in exchange for 40pc or more.

The struggling telecoms firm has been preparing to split into three as it seeks to pay down debt. Last year, it sold its business telecoms division to a company controlled by its main shareholders for £95m.

TalkTalk, which began life as part of Carphone Warehouse, was taken private by Toscafund and Penta Capital in a £1.1bn deal three years ago. At the time, Ian West, a non-executive director at TalkTalk, said:

The independent TalkTalk directors have taken into account the risks associated in achieving TalkTalk’s strategic ambitions and the wide support that Toscafund would provide in this regard.

Macquarie and TalkTalk declinded to comment.

TalkTalk started life challenging BT as part of Carphone Warehouse – Andrew Milligan/PA03:25 PM GMTEuropean carmakers raise £4bn for gigafactories in race to cut reliance on China

Europe’s largest car manufacturers have borrowed €4.4bn (£3.75bn) to build three new battery factories in the EU as the bloc seeks to cut dependence on China. Michael Bow has the latest:

A joint venture between Mercedes-Benz and Fiat-owner Stellantis has borrowed the funds to build new electric vehicle (EV) “gigafactories” across the continent over the next few years.

Automotive Cells Company (ACC), which is also co-owned by France’s TotalEnergies, said the €4.4bn fundraise was one of Europe’s largest ever debt issues in the EV sector.

Read the full story here

03:05 PM GMTBlackstone to create UK property giant amid bet on growing demand for warehouses

The merger of two warehouse landlords will create one of the UK’s largest owners of industrial property, under plans by private equity firm Blackstone.

Blackstone will merge St Modwen and Industrials REIT with assets from 25 other deals into a new company called Indurent, a memo to staff has revealed.

With more than 200 properties and 26 million square feet, it would become one of the largest owners of British commercial properties.

Blackstone is betting that firms shortening their supply chains and relying less on China will continue to drive up warehouse rents.

02:51 PM GMTFamilies could see £380 fall in energy bills in year from April

Typical households may see significant reductions in their energy bills over the next year, according to projections by BFY Group.

The utility consultant predicts the price cap will fall to £1,630 by April. But with prices expected to fall further, the average family is expected to pay £1,550 in the year to follow.

Energy costs for this summer and the coming winter have fallen by around 40pc in the last 90 days, according to BFY Group.

02:20 PM GMTScrap stamp duty on shares to boost sluggish London Stock Exchange, Hunt told

Investment Bank Peel Hunt has urged the Chancellor to abandon stamp duty on shares to attract more investors and companies to list in London.

The UK has one of the highest levels of tax on stock transactions, which analyst Charles Hall claimed was a “pernicious tax that is having a material impact on UK equity markets.”

Share transactions are taxed at 0.5pc in the UK, despite trading venues in the US, Germany and Australia having no equivalent charge.

Mr Hall said that scrapping the levy would prove cost-effective over time.

He said: “Whilst this would reduce tax in the very short term, it would materially raise tax due to enhanced economic activity and increases in other taxes.”

01:18 PM GMTBrexit condemned UK economy to lower growth and higher inflation, claims Goldman Sachs

The British economy has grown 5pc less than it otherwise would have since the EU referendum as a result of Brexit, analysts at Goldman Sachs have claimed.

In a note to clients, analysts said: “The UK has significantly underperformed other advanced economies since the 2016 EU referendum, with lower growth and higher inflation.”

They added: “The evidence points to a significant long-run output cost of Brexit. Our analysis suggests that the drop in trade has been roughly as expected, the underperformance in investment more pronounced than anticipated but the effect on overall immigration more muted.”

The analysts said that while the energy crisis and the pandemic were also behind lower growth, Brexit had played a significant role.

They highlighted that UK goods trade has underperformed other rich countries by 15pc since the referendum.

01:02 PM GMTLeaving the EU would be "ruinous" for the German economy, say its Finance Minister

Christian Lindner has warned that Germany’s economy would be ruined if it followed the UK out of the EU.

The Finance Minister’s warnings come after the far-right party Alternative for Germany said Brexit should be a “model for Germany” and suggested holding a referendum.

Mr Lindner told Bloomberg the single market was of “utmost importance” for Europe’s largest economy.

“It would ruin our economy (…) This is why we have to tell people, OK, you maybe are not in line with government policies but this is no reason for changing the complete system and for changing what our wealth is based on.”

12:51 PM GMTGerman offices suffer biggest hit to prices in 20 yearsGerman offices

German offices have suffered the sharpest decline in prices in at least two decades, as high interest rates and the shift to remote working throttle the commercial real estate market.

Prices fell by 13pc in the final three months of 2023 from a year earlier, figures from German banking association VDP show.

Across all of last year values dropped by a tenth, marking the most pronounced fall since records began in 2003.

Investors fear the deepening malaise in the sector could plunge banks into crisis, with scrutiny of German lenders intensifying.

A stand-off between buyers pushing for bigger discounts and reluctant sellers suggests prices have further to fall in 2024, according to VDP.

12:06 PM GMTShawbrook Bank owners considering London IPO in boost for beleaguered UK stockmarket

The owners of challenger Shawbrook Bank are reportedly exploring another public initial offering after its plans for a £2bn listing fell through in 2022.

Private equity firms BC Partners and Pollen Street Capital have put out feelers with City investors about a potential listing, in a story first reported by The Times.

Volatile markets and a dealmaking drought scuppered previous plans to sell or list the specialist lender two years ago.

11:43 AM GMTA Trump return to the White House could stoke inflation in the US, warns investorDonald Trump

Private bank and asset manager Pictet has warned that a return of Donald Trump to the White House could trigger a rise in inflation in the US and force the Fed to raise interest rates.

Xiao Cui, US economist, wrote in a note to clients: “Policy proposals from leading presidential candidates are both fiscally expansionary. More restrictive trade and immigration policies under Trump could be perceived as more inflationary.”

American voters will head to the polls in November in an unpredictable election that looks to be a repeat of 2020, with the incumbent Joe Biden again facing Mr Trump.

Ms Cui also highlighted that Mr Trump would not renominate Fed Chair Jay Powell when his term ends in 2026, leaving open the possibility that he would instead try to put an “unorthodox candidate” in charge of the world’s largest central bank.

11:31 AM GMTSantander cuts mortgage rates only three weeks after hiking

Santander is cutting rates on mortgages for borrowers looking to remortgage and for buy-to-let landlords.

The lender said residential borrowers would see cuts of 0.05pc and 0.16pc, while rates for property investors would be reduced by 0.05pc and 0.16pc.

It comes only three weeks after the bank became the first major lender to increase mortgage rates this year despite fierce competition in a sluggish market.

Justin Moy, managing director of EHF Mortgages, said the cuts suggested that “we are currently in a yo-yo mortgage market.”

11:07 AM GMTSignificant job losses and store closures unavoidable for The Body Shop, experts warn

Struggling clean skincare retailer the Body Shop is expected to enter into administration this week, becoming the latest high street victim to succumb to high interest rates and low consumer spending.

The brand has more than 200 stores in the UK, meaning there could be significant redundancies.

Insolvency lawyer Gavin Kramer at Collyer Bristow warned: “It is an unfortunate reality that a business in this situation can seldom avoid significant job losses and store closures.”

He added: “Given its positive reputation, and the strong demand for ethically sourced consumer products, The Body Shop will hopefully, after entering administration, be able to find a buyer for at least some elements of the business, like its most profitable stores or its online retail business.”

10:52 AM GMTIMF's Georgieva warns over risk to global economy from Israel-Hamas war

Kristalina Georgieva, head of the International Monetary Fund, has warned unrest in the Middle East can hit global growth.

She told an audience in Dubai: “I fear most a longevity of the conflict because (if) it goes on and on, the risk of spillovers go up.”

Houthi attacks in the Red Sea in retaliation over Israel’s bombardment of Gaza are a key risk, she said.

Ms Georgieva said: “Right now we see a risk of spillover from the Suez Canal. But if there are other unintended consequences in terms of where the fighting goes, then it can become much more problematic for the world as a whole.”

10:28 AM GMTIMF head "very confident" on soft landing and imminent rate cuts

The International Monetary Fund’s chief, Kristalina Georgieva, has said the world economy will be able to recover from high interest rates without a significant downturn.

Ms Georgieva said: “We are very confident that the world economy is now poised for this soft landing we have been dreaming for.”

Speaking at the World Governments Summit in Dubai, the head of the world’s lender of last resort also said:

“I expect to see by mid-year interest rates going in the direction inflation has been going on for the last year”.

10:11 AM GMTWorst year for private equity since financial crisis

Private equity funds last year generated the lowest amount of cash for investors since the financial crisis, according to Raymond James Financial.

Limited partners received 11.2pc of funds’ net asset value, well below the 25pc median figure across the past 25 years and the lowest since 2009.

High interest rates, jittery markets and economic uncertainty mean private equity firms are struggling to sell their existing investments or do initial public offerings.

It means pension and sovereign wealth funds and other key investors are seeing far lower returns than in previous years.

10:02 AM GMTLondon rents show signs of slowing in January

Growing numbers of landlords in the capitals have had to reduce their asking prices after record rent increases have enticed many back into the market.

Estate agency Chestertons said there were 41pc more rental properties available in London than in January last year.

It comes as recent figures from Rightmove have found that the average time a property is listed on the market before getting snapped up has risen to 39 days, up from 33.

As a result, there has been a 76pc rise in investors reducing their asking rents from last year, the estate agent said.

Adam Jennings, head of lettings at Chestertons, said:

“We have seen a significant increase in landlords bringing their property to market as they have been attracted by the substantial rent increases over the last 18 months or so. This influx of properties has led to more choice for tenants and as a result, many landlords have decided to lower their rent expectations.”

09:28 AM GMTLabour vows to ‘modernise’ non-dom taxJohathan Reynolds

Labour has vowed to create a “modern” tax system for foreigners living in Britain receiving income from elsewhere to replace the “colonial-era” non-dom regime.

During a visit to India Shadow Business Secretary Jonathan Reynolds said the “the case for modernisation” is clear, in a story first reported by the Financial Times.

Mr Reynolds said Labour would aim to attract global talent who bring “ability” and “innovation”.

He warned however that “I don’t think we need to be supplicants”.

The non-dom scheme allows foreign nationals living in Britain to make money on capital abroad without paying tax on it for up to 15 year years.

Labour has long said it plans to scrap or significantly alter the scheme.

09:11 AM GMTAnnual pay rises to slow for the first since the pandemic

Employers’ expectations of how much they will have to increase pay over the next year have fallen for the first time since 2020.

Bosses in the private sector report they expect to increase pay by 4pc in 2024, down from 5pc.

Public sector workers will see a similar decline in wage growth, with bosses predicting wages will only rise 3pc – down from 5pc.

The survey by the Chartered Institute of Personnel and Development (CIPD) also showed that one in ten workplaces expect to reduce their headcount in the next three months, suggesting more workers will be faced with redunancy.

One in three are expecting to hire more people, however.

09:01 AM GMTNew FTSE 100 property giant created after Tritax buys rival

Property investment trust Tritax Big Box has put out an all-share bid for its smaller rival UK Commercial Property (UKCM), which will leapfrog it onto the FTSE 100.

The buyout means the firm will have a £6.3bn portfolio that generates more than £290m of rental income a year. Its market value is expected to surpass £4bn.

Tritax counts Amazon, Ocado and B&Q among the biggest tenants renting its distribution warehouses.

08:42 AM GMTUK stocks open higher ahead of crucial week

The benchmark British stock indices started the week higher, as investors brace for a flurry of crucial data that could determine the pace of rate cuts.

The bluechip FTSE 250 rose 0.7pc when markets opened, while the FTSE 100 received a 0.2pc boost.

It comes as figures on Tuesday and Wednesday will reveal whether wages and consumer prices are cooling as policymakers battle to bring inflation back to 2pc.

Traders are expecting pay rises to slow significantly while inflation is tipped to rise slightly to 4.1pc in January.

Should these figures come in higher, it will knock expectations that the Bank of England could soon start lowering interest rates from their 16-year-high of 5.25pc.

This week will also reveal whether the UK economy slipped into recession at the end of the year.

08:23 AM GMTWatch: Angry mob sets Waymo driverless car ablaze in San Francisco

A crowd vandalised a car and set it on fire with fireworks in the most destructive attack on driverless vechicles so far in the US over the weekend.

Read the full story here

08:12 AM GMTTUI shareholders to decide future of London listingTUI airplane

Europe’s largest travel operator could deliver another embarrasing blow to the struggling London Stock Exchange this week.

Shareholders will vote on Tuesday whether the travel agent, which is listed in London and Frankfurt, should abandon its UK listing.

The firm said in December it was considering the move.

It comes as the boss of IWG has branded Britain as being on “bit of a downer” and said the firm was still considering moving to the US.

08:04 AM GMTRecord drop deepens woes for Germany's office property market

The German market for office buildings has suffered its sharpest decline in two decades, as high interest rates and remote working have soured investor sentiment.

Prices fell by 13pc in the final three months of 2023 from a year earlier, figures from German banking association VDP show.

Across all of last year values dropped by a tenth, marking the most pronounced fall since records began in 2003.

Investors fear the deepening malaise in the sector could plunge banks into crisis, with scrutiny of German lenders intensifying.

07:54 AM GMTBitcoin on course for best week in more than a year

Bitcoin is flirting with a winning streak last seen more than a year ago after a sharp boost in early Asia trading.

It had risen by 1pc by 9.50am in Singapore on Monday morning, paving the way for a seventh day of gains.

The digital asset has attracted more than $9bn in inflows so far in 2024.

It remains about $20,000 below the record high the token hit in 2021, during a pandemic-era bull run oiled by ultra-low interest rates.

07:41 AM GMTFive things to start your day

Good morning,

The biggest stories to start your day:

1) Vodafone pays out more than $1bn in advisory fees since 2000 | Telecoms giant spends huge sums on bankers and lawyers as part of turnaround efforts

2) Labour donor urges party to borrow billions for green revolution | Entrepreneur Dale Vince argues that sustainable infrastructure will pay its own debt

3) Britain aims to revive plans for nuclear power station in Wales | Taxpayer-backed body looks to acquire Anglesey site in a bid to replace ageing reactors

4) EY borrowed $700m for failed spin-off plan | Debts at accountancy firm’s global operating business triple year-on-year to $983m

5) Buyout barons KKR set to win battle for British Gas smart meter installer | Majority of shareholders in Smart Metering Systems back takeover by US firm

What happened overnight

Markets across Asia – including Japan, China and Hong Kong – were broadly closed on Monday for Lunar New Year holidays.

By Pratima Desai

LONDON (Reuters) – Commodity trader Trafigura has delivered large amounts of zinc to London Metal Exchange warehouses in Singapore under lucrative rent-sharing deals, three sources familiar with the matter said, pushing stocks there back towards November's 20-year peak.

Two of the sources said London-listed miner Glencore was also delivering zinc to LME registered warehouses, but that the quantities are small. Reuters was not able to establish the exact amounts of zinc being delivered into the LME system by Trafigura and Glencore.

Trafigura and Glencore declined to comment in response to a request for comment.

"Trafigura is delivering (in Singapore) for rent deals," one of the sources said, adding that Glencore too had been sending zinc to LME warehouses in Singapore. "There's a lot more zinc waiting outside (the LME system)."

So-called "rent deals" are agreements under which LME warehouses share their fees or rental income with companies that deliver metal to them.

Weak demand for zinc – used to galvanise steel, particularly in top consumer China where the property slowdown has hit buying – makes rent deals possible, as less material is feeding through to consumers and more is in need of storage.

The firm that delivers the metal to a warehouse does not retain ownership under the rent deals, but still gets a share of the rent as long as the metal stays in the warehouse, and the fees are paid by the new owners of the metal.

After steady drawdowns in January, 41,150 tons of zinc have been delivered LME warehouses in Singapore since Feb. 1, taking the total to 198,275 tons on Friday. In November they reached their highest since 2003 at just over 200,000 tons.

Maximum rent LME warehouses can charge for zinc in Singapore is 53 U.S. cents a ton per day, which on 41,150 tons would yield around $21,800 a day in rental income.

Total zinc stocks in all LME locations on Friday amounted to 238,275 tons.

Visibility of surpluses is behind the climbing discount for the cash over the three-month contract at around $17 a ton compared with a $10 discount on Feb. 1.

Benchmark zinc prices on the LME fell to $2,278 a ton on Monday, the lowest since August last year.

(Reporting by Pratima Desai; Editing by Jan Harvey)

(Reuters) – Glencore said on Monday it will sell its stake in Koniambo Nickel SAS (KNS) in New Caledonia and that production at KNS's processing plant will be halted for six months while a new investor is sought for the loss-making business.

France has been negotiating to save New Caledonia's nickel industry and Paris said last week it had offered KNS state support worth around 200 million euros.

"Even with the French government's proposed assistance, high operating costs and current very weak nickel market conditions means KNS remains an unprofitable operation," Glencore said in a statement.

"Glencore will shortly initiate a process to identify a potential new industrial partner for KNS," it said.

The French government took note of Glencore's decision and would maintain its offer of state aid for KNS, a finance ministry official told reporters.

The government's position remained that an industrial player and not the state should invest in KNS and New Caledonia's other nickel processors, the official said, adding that Paris was not excluding at this stage the possibility of a Chinese investor.

Commodities miner and trader Glencore said last year it would only finance KNS, in which it has a 49% stake, until the end of February after pouring billions into the operation.

Glencore added in Monday's statement that it would fund KNS during the six-month period in which the company's plant will be placed in "care and maintenance".

The plant's furnaces will remain hot to maintain the viability of the site and all local KNS employees will be retained, it said.

The move to halt production should allow Glencore to avoid a negative impact on core earnings (EBITDA) of up to $400 million, with a full annual saving likely from 2025, Citi analysts said.

KNS is a joint venture between Glencore and Societe Miniere du Sud Pacifique SA (SMSP), the latter controlled by New Caledonia's northern province.

High costs and political tensions in New Caledonia, coupled with competition from Indonesia, have left the French territory's three processing plants on the verge of collapse.

The other two nickel processors are SLN, in which French miner Eramet has a majority stake, and Prony Resources, in which commodity merchant Trafigura has a minority stake.

The government aims to reach an agreement in the coming weeks on New Caledonia's nickel sector, the official said, declining to comment on terms discussed with SLN and Prony Resources.

(Reporting by Gus Trompiz in Paris, Clara Denina in London and Eva Mathews in Bengaluru; editing by Kirsten Donovan and Jason Neely)

(Bloomberg) — Glencore Plc plans to sell its stake in a nickel mine and a processing plant on the islands of New Caledonia following a dramatic slump in prices.

Most Read from Bloomberg Businessweek

(Adds analyst comment in paragraph 3, background)

LONDON, Feb 1 (Reuters) – Miner and trader Glencore on Thursday reported lower copper, nickel and cobalt production in 2023 and signalled a further decline in output this year.

Copper, nickel and cobalt are materials used for electric vehicles, a key plank of the energy transition.

"Production challenges have become common in the industry, and a lack of supply growth in most commodities in mining should lead to a squeeze higher in prices over the next 12+ months," Jefferies analysts said.

"Higher prices over time should offset the negative impact of declining volumes for Glencore," they added.

The London-listed company reiterated its expectation that 2023 profits from its trading division would be $3.5 billion, above its long-term guidance range between $2.2 billion and $3.2 billion.

Glencore said it produced 1.01 million metric tons of copper in 2023, down 5% from 2022 and compared to its previous guidance of 1.04 million tons.

It now expects copper production of between 950,000 and 1.01 million tons this year, reflecting the sale of its Cobar mine in Australia.

Analysts have forecast a copper deficit from this year on signs that supply may not be as robust as previously thought after Panama ordered the closure of First Quantum's 350,000 ton-a-year mine and major producers Anglo American , Codelco and Vale Base Metals lowered their guidance.

Glencore produced 97,600 tons of nickel in 2023, lower than its revised October guidance, partly due to a maintenance shutdown of its Murrin Murrin mine in Australia. It expects 2024 production of about 80,000 to 90,000 tons.

Other producers including the world's largest listed miner BHP have put nickel projects on ice to counter falling prices for the metal.

Glencore's cobalt production stood at 41,300 tons in 2023. The company expects this to be between 35,000 and 40,000 tons this year. (Reporting by Clara Denina; editing by Jason Neely and Jamie Freed)

LONDON (Reuters) – Miner and trader Glencore on Thursday reported lower copper, nickel and cobalt production in 2023 and signalled a further decline in output this year.

Copper, nickel and cobalt are materials used for electric vehicles, a key plank of the energy transition.

"Higher prices over time should offset the negative impact of declining volumes for Glencore," they added.

The London-listed company reiterated its expectation that 2023 profits from its trading division would be $3.5 billion, above its long-term guidance range between $2.2 billion and $3.2 billion.

Glencore said it produced 1.01 million metric tons of copper in 2023, down 5% from 2022 and compared to its previous guidance of 1.04 million tons.

It now expects copper production of between 950,000 and 1.01 million tons this year, reflecting the sale of its Cobar mine in Australia.

Analysts have forecast a copper deficit from this year on signs that supply may not be as robust as previously thought after Panama ordered the closure of First Quantum's 350,000 ton-a-year mine and major producers Anglo American, Codelco and Vale Base Metals lowered their guidance.

Other producers including the world's largest listed miner BHP have put nickel projects on ice to counter falling prices for the metal.

Glencore's cobalt production stood at 41,300 tons in 2023. The company expects this to be between 35,000 and 40,000 tons this year.

(Reporting by Clara Denina; editing by Jason Neely and Jamie Freed)

Most readers would already be aware that Antofagasta's (LON:ANTO) stock increased significantly by 27% over the past three months. Since the market usually pay for a company’s long-term fundamentals, we decided to study the company’s key performance indicators to see if they could be influencing the market. Specifically, we decided to study Antofagasta's ROE in this article.

ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.

View our latest analysis for Antofagasta

How Do You Calculate Return On Equity?

The formula for return on equity is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Antofagasta is:

18% = US$2.1b ÷ US$12b (Based on the trailing twelve months to June 2023).

The 'return' is the yearly profit. So, this means that for every £1 of its shareholder's investments, the company generates a profit of £0.18.

What Has ROE Got To Do With Earnings Growth?

Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.

A Side By Side comparison of Antofagasta's Earnings Growth And 18% ROE

At first glance, Antofagasta seems to have a decent ROE. On comparing with the average industry ROE of 11% the company's ROE looks pretty remarkable. Probably as a result of this, Antofagasta was able to see an impressive net income growth of 26% over the last five years. We reckon that there could also be other factors at play here. Such as – high earnings retention or an efficient management in place.

We then compared Antofagasta's net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 20% in the same 5-year period.

past-earnings-growth

The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Antofagasta is trading on a high P/E or a low P/E, relative to its industry.

Is Antofagasta Making Efficient Use Of Its Profits?

Antofagasta's significant three-year median payout ratio of 77% (where it is retaining only 23% of its income) suggests that the company has been able to achieve a high growth in earnings despite returning most of its income to shareholders.

Besides, Antofagasta has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Existing analyst estimates suggest that the company's future payout ratio is expected to drop to 42% over the next three years. Still forecasts suggest that Antofagasta's future ROE will drop to 8.8% even though the the company's payout ratio is expected to decrease. This suggests that there could be other factors could driving the anticipated decline in the company's ROE.

Conclusion

On the whole, we feel that Antofagasta's performance has been quite good. Especially the high ROE, Which has contributed to the impressive growth seen in earnings. Despite the company reinvesting only a small portion of its profits, it still has managed to grow its earnings so that is appreciable. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company.

Freeport-McMoRan and Southern Copper have seen their stocks gain 17% and 20%, respectively, since their mid-October lows. Expect more of the same if copper keeps pushing higher.

Freeport-McMoRan (FCX) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this mining company have returned -7%, compared to the Zacks S&P 500 composite's +2.5% change. During this period, the Zacks Mining – Non Ferrous industry, which Freeport-McMoRan falls in, has lost 7.2%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings Estimates

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Freeport-McMoRan is expected to post earnings of $0.38 per share, indicating a change of -26.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.7% over the last 30 days.

For the current fiscal year, the consensus earnings estimate of $1.56 points to a change of +1.3% from the prior year. Over the last 30 days, this estimate has changed -7.4%.

For the next fiscal year, the consensus earnings estimate of $2.34 indicates a change of +49.9% from what Freeport-McMoRan is expected to report a year ago. Over the past month, the estimate has changed -0.9%.

With an impressive externally audited track record, our proprietary stock rating tool — the Zacks Rank — is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Freeport-McMoRan.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth Forecast

Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Freeport-McMoRan, the consensus sales estimate for the current quarter of $5.57 billion indicates a year-over-year change of +3.4%. For the current and next fiscal years, $23.02 billion and $23.64 billion estimates indicate +0.7% and +2.7% changes, respectively.

Last Reported Results and Surprise History

Freeport-McMoRan reported revenues of $5.91 billion in the last reported quarter, representing a year-over-year change of +2.6%. EPS of $0.27 for the same period compares with $0.52 a year ago.

Compared to the Zacks Consensus Estimate of $5.82 billion, the reported revenues represent a surprise of +1.45%. The EPS surprise was +28.57%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.

Valuation

Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Freeport-McMoRan is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Conclusion

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Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report

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Zacks Investment Research

Freeport-McMoRan Inc. (NYSE:FCX) Q4 2023 Earnings Call Transcript January 24, 2024

Freeport-McMoRan Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Freeport-McMoRan Fourth Quarter Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session [Operator Instructions]. I would now like to turn the conference over to Ms. Kathleen Quirk, President. Please go ahead, ma'am.

Kathleen Quirk: Thank you, and good morning. Welcome to Freeport-McMoRan conference call. Earlier this morning, we reported our fourth quarter and full year 2023 operating and financial results. And a copy of today's press release and supplemental schedules and slides are available on our Web site at fcx.com. Our conference call today is being broadcast live on the Internet and anyone may listen to the call by accessing our website homepage and clicking on the webcast link for the conference call. In addition to analysts and investors, the financial press has been invited to listen to today's call and a replay of the webcast will be available on our website later today. Before we begin our comments, we’d like to remind everyone that today's press release and certain of our comments on the call include non-GAAP measures and forward-looking statements and that actual results may differ materially.

I would like to refer everyone to the cautionary language included in our press release and presentation materials and to the risk factors described in our SEC filings. Also on the call with me today are Richard Adkerson, our Chairman and CEO; Maree Robertson, our Chief Financial Officer; Josh Olmsted, our COO of Americas; Mark Johnson, Operating Officer for Indonesia; Mike Kendrick, who runs our molybdenum business; and Steve Higgins, our Chief Administrative Officer. We'll start the call with some opening comments from Richard and then we will go through the slide presentation materials and then open up the call for your questions. So I'll turn it over to Richard. Richard, go ahead.

Richard Adkerson: Okay. Good morning, everyone. As you can see, our first quarter was really a sound quarter and outstanding in several respects in terms of our operations. It was really led by PT-FI during the whole year of 2023. We began our ramp up in 2019 of the underground and now we are fully operationally, and the team has been setting records consistently out there and have just outperformed for the full year and faced some really challenges, which is just part of that business. But I'm very proud of our PT-FI team at job site in Jakarta. We are making great progress and fulfilling our 2018 commitment to the government to invest in downstreaming and the copper concentrate business. In December, I was there for the inauguration of the expansion of the older smelter, PT Smelting with President Joko Widodo and that was a good event.

And then with our new smelter at Manyar in Eastern Java, we reached an important 90% milestone at the end of the year and we're progressing for physical completion of the smelter and ramping it up on schedule in 2024. A couple of words about the markets. It continues to be the micro versus macro story. Notably, in 2023, the macro factors strengthened notably. 2023 had long been forecasted to be a year of surplus because of new mines coming on stream, but it ended up being a small deficit. And at the same time, there was stronger than expected demand for copper in the United States and in China despite all the issues with China's property business other sectors created a notable growth for copper in China. Then there were the supply shortfalls throughout the industry for some significant mines and these for range of factors that are kind of common to our business.

The copper business, mining business is a tough business, but it was political issues in some countries, community issues and then operating issues. As a result of all that, inventories of copper around the world are at historically low levels and the inventory levels are really inconsistent with the current copper price. The copper price clearly being driven by macroeconomic factors. The currency, the strong US dollar, carryover effects of inflations, government fiscal policies, and there are concerns about economies in China and Europe. But if the macro outlook — and I'll just say when the macro outlook improves, watch out for the copper price. Looking ahead, the world's going to need significantly more copper in the future for a variety of factors.

The world's just becoming increasingly electrified and that's what copper is used for. And it's at a time when the industry is simply not investing to grow production that the outlook indicates that will be required for economic, operational and resource nationalism, a series of factors, but the facts are there's an outlook for strong demand and supply challenges. That's why I'm so personally confident about where Freeport is positioned and pleased with it. We have high volume existing production that's sustainable. We have large sustainable reserves and resources. We have growth opportunities that we will pursue prudently from this really exciting leaching initiative that Kathleen will be talking about and from brownfield expansions of our existing orebodies.

Before turning over to Kathleen, I just want to send a note of condolences to our friends at Rio Tinto. You may have seen the news, but they had a plane to go down in Canada heading to their diamond operations there. Rio has been a special part of Freeport's history. Of course, they were our partners for many years at Grasberg. I have worked with six, seven, eight CEOs over my career. Some of my closest colleagues have been with that company. And the toughest part of being a CEO is to lose people and I'm just so sad to hear this news and the whole Freeport family's heart goes out to our friends at Rio. With that Kathleen, I will turn over to you.

Kathleen Quirk: Okay. Thank you, Richard. And I will be covering the presentation materials starting with Slide 3, our achievements for 2023 are summarized here. Our sharp focus on executing our plans in an effective, safe and responsible manner, managing the controllable drivers and navigating challenges successfully, all translated into solid operating results over the year. A big highlight for the year was the outstanding progress in Indonesia where we grew production levels for the fourth year in a row. We posted several new operating records and we continue to enhance values for this large scale, low cost and long life resource. We were also successful in reaching several milestones during the year, including reaching our target run rate for incremental leach production in the Americas, enhancing optionality in the Americas for our brownfield growth projects and reaching our targeted 90% completion milestone for the Indonesian smelter project by the end of 2023.

As a leader in the industry, we were one of the first companies to have all of our operating sites certified under the copper and molybdenum marks, and this demonstrates our performance and commitment to responsible mining practices. We ended the year 2023 in a strong financial position, a positive outlook and as we work together to enhance long term value for shareholders. On Slide 4, we summarize the key results for 2023 compared with historical levels. After growing our volumes from 2020 to 2021 and 2022, we were able to same production of copper in 2023 despite a challenging environment for copper supplies Richard discussed, and we reported another year of growth in gold production. Our unit net cash costs for 2023 were above the 2022 level as expected but they came in very close to our original guidance for the year.

We are continuing to actively manage cost and profitability initiatives to address cost inflation, and we will be working on that as we go forward. For the year 2023, we generate strong EBITDA of $8.8 billion and operating cash flows of over $5 billion. We are continuing to carefully manage not only our operating costs but also capital expenditures with a priority on spending on projects to sustain production, improve efficiencies and enhance optionality for future development options with attractive rates of return. During 2023, we returned $860 million to shareholders, bringing the total shareholder returns to $3.8 billion since we implemented our performance based payout framework in 2021. We ended the year with net debt of approximately $800 million and that excludes the smelter related debt, which is being financed separately.

I'm going to move to Slide 5 and talk about the fourth quarter. During the fourth quarter, our sales were 3% above our estimates going into the quarter. Our gold production was also very strong. But our shipments of gold in the fourth quarter was slightly below the previous estimates and that reflected timing in these shipments when we made in the first quarter. Unit net cash costs averaged $1.52 per pound in the fourth quarter that was better than our guidance of $1.58 per pound and slightly below the year ago period. Notably, unit net cost, cash costs in Indonesia were zero in the fourth quarter, zero cents per pound, meaning our gold credits completely offset the production cost for copper. Average copper realizations in the fourth quarter were $3.81 per pound and we generated $2.3 billion in EBITDA and operating cash flows of $1.3 billion.

We go around the world and talk a little bit about our various operations in the fourth quarter. In the US, we made progress in increasing our mining rates, that's been a big focus during the quarter with a 9% increase over the year ago quarter. We have a continued focus on improving our asset efficiencies and workforce experience levels. These are important initiatives as we seek to increase productivities to combat lower ore grades. Our innovative leach initiatives met expectations and also helped to mitigate the impact of lower ore grades in the US. Labor market conditions in the US continue to be tight. We're taking steps to expand housing options in our remote locations for recruiting and retention, and we're also continuing to pursue technology solutions to enhance productivity.

Conversion of the bad debt truck fleet to fully autonomous is advancing and we're targeting to commence the transition in the second half of next year. In South America, our ore milled was sustained above 400,000 metric tons per day and our ore stacking rates increased at El Abra. No recoveries at Cerro Verde in the fourth quarter of 2023 were below the year ago level because of the material types that we're mining in the fourth quarter. This is continuing for mining phases in early 2024 and we're working to optimize performance. As Richard discussed, the fourth quarter performance in Indonesia was exceptional. Underground ore mined averaged over 214,000 tons per day and that was 8% higher than the year ago period. Combined with strong grades and recoveries, our copper and gold production in the fourth quarter was over 20% higher than last year's fourth quarter.

We completed the installation of a new SAG mill at PT-FI in December and that'll provide additional opportunities for us going forward. And the team is just doing outstanding work, sustaining and optimizing value from this large resource position. We thought it'd be good to look back in history of how the underground transition has gone, Slide 6 covers this. We show the history of the progression of the transition. As Richard mentioned, we stopped mining from the surface in the Grasberg open pit at the end of 2019 and transitioned to fully underground operations beginning in 2020. We have a long history in Indonesia, spanning over 56 years and a great track record for building value over many years for all stakeholders. We’re extremely proud of the team's execution on this transition.

We now have the world's largest underground mining complex and it’s been developed in a modern efficient operation. The Grasberg is the world's second largest copper mine and one of the largest gold mines, even though gold is a byproduct. High grades of both copper and gold make it one of the lowest cost operations in the world as well. This took a lot of planning. We began planning for this underground area over 25 years ago and commenced development activities in 2004. And as you can see from the graph, the project is performing exceptionally well and generating strong margins and cash flows. As we look forward, we are continuing to make investments in this resource to enhance value and sustain long term performance. We are working on the extension of our operating rights beyond 2041 and increasingly confident about securing our long term rights, and that would extend lives of our resources and open a whole new set of opportunities for this district.

Richard touched on the smelter progress and this is really important for us in terms of securing long term rights. We reached two important milestones on these initiatives in 2023. The projects include a new greenfield smelter in East Java and expansion of our nearby existing smelter, which was developed in the late 1990s. Richard mentioned we celebrated in December the completion of the expansion project with the Indonesian Government and our Japanese partner. And we also reached a really important milestone on progress of the greenfield project with completion progress achieving a target we set with the government of over 90% by the end of December. We posted a video this morning on our Web site that shows the Greenfield smelter project. You can see all the progress that's been made and you can see the sheer size and scale of this impressive facility, and I hope you will have a chance to look at it.

Both projects have been executed very efficiently in the context of a challenging market for major project development. The internal team that we have working on this project together with our contractor have done an outstanding job containing costs and maintaining schedules. We are working to complete the construction by the end of May of 2024 and to start commissioning and to conduct the ramp-up period over the balance of 2024. This is a big deal for us. It's not very frequent that you see new smelters starting up, and we have done a lot of planning going into the start up process. Our teams are well prepared and really highly motivated to achieve a safe, efficient and timely start-up in 2024. Turning to the US and the Americas where we've got an important leach initiative ongoing.

We achieved our targeted run rate where we were targeting approximately 200 million pounds of copper per year by the end of 2023. This is an exciting and innovative initiative involving new operating practices being applied to our traditional leach operations and really working to get more out of our massive stockpiles that contain material that has been placed in prior years. Remember as we talked about on prior calls, the cost of this, the incremental cost of production, is low from both an operating and capital perspective, because we're targeting material where the material has already been mined and we're largely using existing infrastructure to extract the new metal. The first phase of this initiative essentially involves four basic categories of actions.

A large open-pit copper mine with heavy machinery extracting minerals from the earth.

One, as we talked about previously, we commenced the process to install covers over the stockpiles to increase heat retention and drive higher recoveries. Two, we gained access to areas in the stockpiles that have not previously had the benefit of leach solution initiative, we call leach everywhere. Three, we started using drilling techniques to specifically target areas within the stockpile where solution was lacking. And importantly, the fourth area is developing more sophisticated models using data analytics to optimize the application of solutions to improve performance, and using this data as a valuable tool in guiding work in all the areas of initiatives in this important program. As we look at where the impacts came from, you can see most of the incremental production was from our Morenci mine.

That mine has a very long history of leaching operations. We have a massive set of stockpiles there and a very large opportunity set at Morenci. As we go to Phase 2 of the project where we are working to essentially double the initial target from 200 million pounds to 400 million pounds, we really are looking at just scaling these practices further. And by continuing to scale the operating practices, we think we can double the initial target over the next two to three years. And as we continue to work to sustain the production, we can add to our reserve position, and that's a real focus of ours to capitalize the progress into long term reserve additions. The first and second phase of this initiatives is really operationally driven using existing technologies.

The third phase, which is also very exciting, is really the work that we and others are doing to advance the leaching process using different additives and different techniques, and this is more of an R&D effort but it's being advanced. We're commencing a large scale testing activity to evaluate the response to new additives. And we're also evaluating opportunities to get more heat retention in our stockpiles, and heat really is an enabler of more copper production and higher recoveries. In aggregate, these initiatives have the potential to reach 800 million pounds per annum and that's equivalent to a large scale copper mine. And notably, it's got very low capital intensity and you have seen how much new copper mines cost. This is a very low capital intensity, low incremental operating costs and a low carbon footprint.

The value potential here is very attractive, particularly for a company like Freeport to take advantage of given our large quantities of suitable materials that we previously mined. Richard touched on copper markets earlier and we have some information on Slide 9. Physical markets have continued to tighten, inventories have declined and demand is growing. Despite the weak sentiment over the last several quarters on the Chinese economy and property sector, the reality is that China's copper consumption was strong throughout 2023 and this reflected the intensity of copper used in energy infrastructure, renewables and electric vehicles. In the US, our customers continue to report solid demand for copper with growth in several sectors. At the same time, supply disruption increased meaningfully in recent months.

In total, near term supplies of copper had been reduced by over 700,000 tons in a very short period of time. The market was previously expecting that 2024 would be a small surplus market and turning to deficit beginning in 2025 timeframe and continuing for some time. With the recent supply disruptions and continued demand growth, the deficit market has been advanced into 2024, setting up for tight market conditions in the near term. While the fundamentals have become significantly more positive, macro conditions tied to US dollar strength and sentiment about China have influenced copper price movements. Richard mentioned we believe the fundamentals of the market will lead to significantly higher copper prices in the future and that's supported by anticipated strong growth in demand associated with secular trends and the global economy's requirements for copper.

Also, the realities of the cost and time frames required for new supply development is an important factor when we look at the fundamental outlook for copper. Turning to how Freeport is positioning to try to grow production in response to this market demand. On Slide 10, we really look at the sizable reserve position of copper and even larger resource position that Freeport has that supports a pipeline for future growth options. Within the portfolio, we look for opportunities to get more out of what we have through innovation and operating efficiencies. We look for investments and projects so we have large resource positions and where we have established track records and opportunities to leverage the existing infrastructure, our people and capabilities, all with the drive focused on increasing value.

We categorized on Slide 10 our near term, medium term and longer term development options. And we have outlined identified projects totaling about 1.7 billion pounds of copper in the Americas. And we have also highlighted on the slide the ongoing development of the Kucing Liar project in Indonesia, which is expected to support long term production profiles in the Grasberg District. The opportunities that are shown on the slide in the two to three year category they center around scaling our leach initiatives and achieving incremental production from our operational improvement projects. Together the potential from these opportunities total 400 million pounds of incremental copper per annum and do not require significant investment or long lead times.

We discussed earlier the leach projects but we're also dedicating significant resources to enhancing productivity and asset efficiencies, rebuilding the experience of our workforce given the large number of new hires in recent years and utilizing new technologies and automation to restore and improve on productivity metrics that weakened somewhat during the pandemic. As we indicated, we completed a feasibility study late in the year 2023 to evaluate a project to more than double the size of our Bagdad operation in Northwest Arizona. The reserves at Bagdad are — span for decades and they support expansion of infrastructure at the site to bring value forward. The incremental capital costs to build a new concentrator and support infrastructure for significantly higher mining and milling rates is on the order of $3.5 billion.

And an expanded operation would not only substantially increase copper production but would produce economies of scale and reduce unit costs. The project does not require major permitting and is relatively straightforward. But given the tight labor market conditions and general market factors, we're not making a decision right now on the timing of the project. We'll continue to evaluate the timing of when we would go forward, but we are taking steps now to enhance optionality for the future by making some investments in the autonomous haulage for our mining operations, making some investments in housing and also advancing investments in the tailings infrastructure that will put us in a position and we make the decision we could get the project online within a few years.

In Chile, at El Abra, we've talked about this. Our resource is very large. We have a major opportunity to install a new concentrator on the order of magnitude size of the concentrator we added at Cerro Verde in 2015. We'll continue to work to retest the economics and updating our project capital costs in light of recent capital cost experience of other large projects. And in parallel, we're starting work in preparation for environmental impact statement that would give us the ability to advance the project and provide optionality for future development. We mentioned the Kucing Liar development project in the Grasberg District, which we've initiated development on. This is a multiyear development project and it's proceeding on schedule and we expect to commence production by 2030, ramping up to over 500 million pounds of copper and over 500,000 ounces of gold.

We're also conducting additional exploration in the Grasberg District where we have identified potential. We've got a big potential below our Deep MLZ orebody, and we expect to have additional opportunities in the future at Grasberg. We have a major opportunity in the US at the Safford Lone Star District. We've identified a significant resource there. This year, we're going to work to complete metallurgical testing and mine planning, and start a pre-feasibility study to assess future development options there. We continue to see this district as one that has big potential and potentially being a cornerstone asset in the US adjacent to the Morenci operations. In Indonesia, we’re focused on this extension of our rights beyond 2041 because that would open up substantial opportunity for reserve and resource expansion and a continuation of the large scale mining in one of the world's largest and highest grade copper and gold mine districts.

We are in a really strong position to continue our leadership role in supplying copper to a world with growing requirements. But we are going to continue to be disciplined in our approach and focused on executing projects where we can create value for shareholders. We have a lot of history in developing big projects, we included a slide on Page 11 that you can take a look at. A key strength of our company is the ability to execute projects successfully. This does not come easy. It requires a focused hands-on approach. And we have got a business model of pairing internal resources with trusted contractors and that has served us well. We have listed several projects that we have led over the years and we have developed very complex projects around the world.

We are going to continue to approach future projects with the same level of preparedness, rigor and a focus on execution. As we look at 2024, turning to Slide 12, we have got our focus areas listed here. And first and foremost, we remain committed to safe and reliable execution of our operating plans across the global business. It seems like a simple thing but this involves discipline and hard work day in and day out. We discussed our focus on enhancing performance in the US through our Leach initiatives and productivity. This is particularly important to mitigate low grades and to manage costs, which have experienced higher inflation in recent years. We are going to have another big year in Indonesia. A key priority for us is to complete the smelter and ramp-up safely and efficiently and to finalize an agreement for extension of our long term operating rights.

We are also very focused on enhancing optionality, definition and the value of our embedded growth options. On Slide 13, as usual, we show a three year outlook for sales volumes of copper, gold and molybdenum. For 2024, the copper sales volumes are slightly reduced less than 2% below our prior estimate and are now expected to be similar to 2023 levels. The gold sales are 10% higher than our prior estimate and higher than they were in 2023, higher sales in Indonesia for the year of 2024 offset by slightly lower sales from the Americas. In 2025, our sales estimates are similar to the prior estimates and we have added 2026 estimates, which you can see are slightly above the 2025 levels. For 2024, we currently estimate our consolidated unit costs to approximate $1.60 per pound.

We have got some details in the reference materials, I believe, on Page 30 that you can look at the composition of those costs, but $1.60 very similar to what we had in 2023. On Slide 14, we put together our projected volumes and cost projections and we model the results for our EBITDA and cash flow at various copper prices ranging from $4 to $5 copper. These models use the average of 2025 and 2026 and our current volume estimates and our cost estimates and holding gold flat at roughly current levels of $2,000 per ounce and molybdenum flat at $19 per pound. And you can see here on the charts that annual EBITDA in these periods would range from $10 billion per annum at $4 copper to over $14 billion per year at $5 copper and operating cash flows under these price scenarios would range from $7 billion to over $10 billion.

And we've got sensitivities to the various commodities on the right hand side of the chart. We're really well positioned with long line preserves, large scale production. We not only have current exposure to copper but all of our future projects and growth opportunities are well positioned to benefit from future metals intensive growth, and this will give us the ability to generate returns on projects and enhance cash returns under our performance based payout framework. Turning to the capital expenditures, on Slide 15. We show our current forecast for 2024 and 2025, which also show where we ended up for 2023, which total of $3.1 billion and that was slightly lower than what we've guided to in October of $3.2 billion. And capital for 2024 is currently forecast to approximate $3.6 billion compared with the $3.9 billion previously.

The 2025 estimates that are new here are currently estimated to total $3.8 billion that includes $1.2 billion in discretionary growth projects, which totaled $2.4 billion over the 2024 and 2025 years. This category reflects the capital investments we're making in new projects to generate returns that under our financial policy are funded with 50% of available cash that's not distributed. They're value enhancing projects that are detailed in the reference materials on Slide 33. We're going to continue to be very disciplined around capital expenditures, carefully managing those. You saw we adjusted the capital expenditures down for 2024. And as we go forward, we'll continue to look at opportunities to do things, to sustain our business and to do things on a low capital intensity basis.

And finally, before we take your questions, we — just on Slide 16, we reiterate our financial policies and those are prioritized, centered on a strong balance sheet, cash returns to shareholders, and investments in value enhancing growth projects. Balance sheet is solid. We've got strong credit metrics and a lot of flexibility within our debt targets to execute on our projects. You may have seen that Moody's upgraded our credit rating in December and that just demonstrates our strong financial profile. Indicated on the slide, we've distributed almost $4 billion to shareholders through dividends and share purchases since the payout framework was implemented in the second half of 2021, and we have an attractive future long term portfolio that will enable us to continue to build value, long term value for shareholders.

The global team, as we go forward, is really highly focused on our strategy of being foremost in copper. And we're driven to continue pursuing long term value in the business and executing our plans responsibly, safely and efficiently. And I want to thank everybody for their attention, and we'll now take your questions.

To continue reading the Q&A session, please click here.

Shares of Freeport-McMoRan Inc. FCX increased 4.1% after reporting fourth-quarter 2023 adjusted earnings of 27 cents per share, beating the Zacks Consensus Estimate of 21 cents.
General Dynamics Corporation’s GD shares jumped 4.7% after reporting fourth-quarter 2023 revenues of $11.7 billion, beating the Zacks Consensus Estimate of $11.5 billion.
Shares of AT&T Inc. T fell 3% after reporting fourth-quarter 2023 adjusted earnings of 54 cents per share, missing the Zacks Consensus Estimate of 55 cents.
American Electric Power Company, Inc.’s AEP shares fell 1.4% on utilities becoming one of the biggest losing sectors in the session.

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Hole	From (m)	To (m)	Interval (m)	Cu (%)	Au (g/t)
ATD-0206	163.5	189.45	25.95	2.09	3.43
including	168	170.2	2.2	11.58	8.63
including	173.1	181.5	8.4	0.57	2.52
including	185	189.45	4.45	5.17	10.47
and	192.25	193.1	0.85	7.57	4.62
ATD-0207	133	144.6	11.6	4.14	1.38
including	136	140.9	4.9	9.35	2.94
and	156.5	159.7	3.2	1.78	7.86
ATD-0208	186.8	199.3	12.5	0.98	4.35
including	186.8	191.4	4.6	1.96	9.27
ATD-0209	189.4	206.5	17.1	1.15	1.94
ATD-0210	159	171.3	12.3	1.11	1.33
ATD-0211	34.1	44.9	10.8	4.39	1.29
including	35.5	37.2	1.7	8.46	1.43
including	39.3	44.9	5.6	5.33	1.91
ATD-0212	22	40.5	18.5	2.29	1.05
including	22	25	3	8.24	3.7
including	27.1	29.6	2.5	2.51	1.09
including	37.5	39.1	1.6	2.34	1.09

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