Copper Archives - MiningFeeds

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

Freeport-McMoRan (FCX)

Based in Phoenix, AZ, Freeport-McMoRan Inc., formerly Freeport-McMoRan Copper & Gold Inc., is engaged in mineral exploration and development; mining and milling of copper, gold, molybdenum and silver; as well as the smelting and refining of copper concentrates. The company conducts its operations primarily through its principal operating subsidiaries, PT Freeport Indonesia (PT-FI), Freeport Minerals Corporation and Atlantic Copper. PT Freeport Indonesia’s principal asset is Papua, Indonesia-based Grasberg mine, which contains the world’s largest copper and gold reserves.

FCX is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 27.7X for the current fiscal year compared to the Mining – Non Ferrous industry's P/E of 20.5X. Additionally, FCX has a PEG Ratio of 1.1 and a Price/Cash Flow ratio of 15.4X. Value investors should also note FCX's Price/Sales ratio of 2.8X.

A company's earnings performance is important for value investors as well. For fiscal 2024, three analysts revised their earnings estimate higher in the last 60 days for FCX, while the Zacks Consensus Estimate has increased $0.00 to $1.66 per share. FCX also holds an average earnings surprise of 23.5%.

FCX should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.

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

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Freeport-McMoRan (FCX) ended the recent trading session at $45.90, demonstrating a -0.04% swing from the preceding day's closing price. This move was narrower than the S&P 500's daily loss of 0.71%. Meanwhile, the Dow lost 0.93%, and the Nasdaq, a tech-heavy index, lost 0.81%.

Heading into today, shares of the mining company had lost 6.97% over the past month, lagging the Basic Materials sector's loss of 0.77% and the S&P 500's gain of 1.08% in that time.

The upcoming earnings release of Freeport-McMoRan will be of great interest to investors. The company's earnings report is expected on July 23, 2024. On that day, Freeport-McMoRan is projected to report earnings of $0.38 per share, which would represent year-over-year growth of 8.57%. Our most recent consensus estimate is calling for quarterly revenue of $6 billion, up 4.53% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $1.66 per share and revenue of $25.36 billion, which would represent changes of +7.79% and +10.97%, respectively, from the prior year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections 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 take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 2.92% lower. Freeport-McMoRan is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that Freeport-McMoRan has a Forward P/E ratio of 27.65 right now. Its industry sports an average Forward P/E of 20.54, so one might conclude that Freeport-McMoRan is trading at a premium comparatively.

Investors should also note that FCX has a PEG ratio of 1.07 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Mining – Non Ferrous industry stood at 0.71 at the close of the market yesterday.

The Mining – Non Ferrous industry is part of the Basic Materials sector. With its current Zacks Industry Rank of 24, this industry ranks in the top 10% of all industries, numbering over 250.

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

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Freeport-McMoRan Inc. FCX is set to release second-quarter 2024 results before the opening bell on Jul 23.The mining giant’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 23.5%, on average. While Freeport is expected to have gained from higher copper prices in the second quarter, increased costs and lower sales volumes are likely to have affected its results.The stock has gained 9.6% in the past year compared with the industry’s 25.9% rise.

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Let’s see how things are shaping up for this announcement.

Zacks Model

Our proven model predicts an earnings beat for FCX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.Earnings ESP: Earnings ESP for Freeport is +2.21%. The Zacks Consensus Estimate for the second quarter is currently pegged at 38 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Zacks Rank: Freeport currently carries a Zacks Rank #3.

What do the Estimates Indicate?

The Zacks Consensus Estimate for Freeport’s second-quarter consolidated revenues is currently pegged at $5,997 million, which suggests a year-over-year increase of 4.5%.

A Few Factors to Watch

Freeport’s second-quarter results are also expected to have been supported by the strength in copper prices. Copper prices have notched gains of roughly 10% so far this year, aided by supply concerns and signs of improving demand from top consumer China. A recovery in China’s industrial sector has led to an uptick in copper demand. Prices of copper were up around 9.5% in the second quarter. Our estimate for second-quarter average realized price for copper currently stands at $4.25, which indicates a year-over-year increase of 10.7% and a sequential rise of 7.9%.However, lower copper and gold sales volumes are expected to have impacted the company’s results. FCX, earlier this month, said that it expects to ship a portion of its second-quarter production in subsequent periods due to the delay in securing PT-FI's export license.

The company expects its consolidated sales for the second quarter to be roughly 5% lower than its April 2024 forecast of 975 million pounds of copper and around 30% lower than its prior view of 500,000 ounces of gold.Moreover, higher costs are likely to have weighed on Freeport’s performance in the quarter to be reported. The company now expects consolidated unit net cash costs for the second quarter to be about $1.77 per pound of copper, compared with its earlier expectation of $1.57 per pound. The expected increase is primarily due to decreased by-product credits as a result of shipment delays.

Freeport-McMoRan Inc. Price and EPS Surprise

Freeport-McMoRan Inc. price-eps-surprise | Freeport-McMoRan Inc. Quote

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they too have the right combination of elements to post an earnings beat this quarter:Agnico Eagle Mines Limited AEM, scheduled to release earnings on Jul 31, has an Earnings ESP of +5.93% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus estimate for AEM’s earnings for the second quarter is currently pegged at 82 cents.ATI Inc. ATI, slated to release earnings on Aug 6, has an Earnings ESP of +3.50% and carries a Zacks Rank #3 at present.The consensus mark for ATI’s second-quarter earnings is currently pegged at 58 cents.Kinross Gold Corporation KGC, scheduled to release second-quarter earnings on Jul 31, has an Earnings ESP of +18.85%.The Zacks Consensus Estimate for Kinross Gold's earnings for the second quarter is currently pegged at 12 cents. KGC currently carries a Zacks Rank #2. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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

ATI Inc. (ATI) : Free Stock Analysis Report

Kinross Gold Corporation (KGC) : Free Stock Analysis Report

Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report

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We recently compiled a list of the 10 Best Materials Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Freeport-McMoRan Inc. (NYSE:FCX) stands against the other materials stocks.

When compared to high growth technology stocks, materials stocks are among the most stable ones on the market. These are often sizeable firms whose performance is tied to the broader economic output. As a result, materials stocks offer investors a chance to ensure that their investments are not affected by the pitfalls of volatility that often accompanies high growth stocks. This volatility is often present in high growth sectors where firms face low barriers to entry, a high level of product diversification from peers which leads to more competition, and even though metals stocks fluctuate with the economy, their sizeable nature and high investment requirements mean that once they've set up shop, they can benefit from somewhat assured demand.

At the same time, their sizeable business operations also make materials stocks pay out handsome dividends. We took a look at some such stocks as part of our coverage of 12 Best Materials Dividend Stocks To Buy Now. Within this list, the top hedge fund materials dividend stocks had a dividend yield that ranged between 0.68% to 5.28%. The average dividend yield was 2% while the median yield among the 12 materials stocks was 1.88%. The top materials dividend stock, which had a yield of 5.28% ranked at 9th place, and it is one of the biggest chemicals companies in the world.

To analyze materials stocks' performance and see what the future might hold for them, a relevant approach is to check how the commodities market is performing. Broadly speaking, materials stocks can be divided into those that sell construction materials and those that deal in metals. Starting from construction materials, the broader construction industry's performance right now is somewhat mixed. The turmoil in the office real estate sector, driven by high interest and vacancy rates, continues to threaten contagion. Similarly, while the status of the residential sector isn't as troubling, higher rates have created some interesting trends. Median housing prices in America soared to a record high of $419,300 in May; however, at the same time, housing supply also grew to 1.28 million to mark an 18.5% annual growth. Higher rates lead to homeowners forking out more for their property, and data from Redfin shows that the value of US homes soared to $47.5 trillion by December 2023.

Overall, US construction spending fell by 0.1% in May to sit at $2.1 trillion. For materials stocks, a slowdown means that their share prices are depressed. However, when compared to other markets, such as agriculture, not all is doom and gloom in construction. Industrial construction for warehouses boomed in 2022 and tapered off in 2023 due to high interest rates. Now, the Dodge Momentum Index, which measures non residential building project planning, increased by 2.7% to 179 in May. However, this, like the broader industry, also came with a caveat. Sequentially, data center construction planning spurred by AI and retail projects led commercial planning to jump by 5.5%. However, the healthcare and public project slowdown led to institutional planning to drop by 3.4%. This data shows that businesses are investing in growth for 2025 as they expect interest rates to fall. At the same time, the Biden-Harris Administration's Inflation Reduction Act and the CHIPS And Science Act coupled with the Bipartisan Infrastructure Act allocate roughly $2.4 trillion to a wide variety of projects ranging from bridges, roads, semiconductor production, and EV production facilities.

In a similar vein, the Inflation Reduction Act is also expected to spur demand in America for some metals. As mentioned earlier, metals demand is the second aspect of materials stocks' valuation. Starting from lithium, data from Bloomberg shows that lithium iron phosphate battery cells in China now cost $54/kWh to mark a 43% annual drop. These prices are dropping since the lithium industry invested heavily in production, which flooded the market with batteries and led to the cost of a cathode falling to 30% of a battery's total cost as compared to the previous value of 50%. Lower prices mean that lithium miners struggle to maintain their margins, which naturally doesn't sit well with investors. Naturally, it's unsurprising that one of the biggest lithium producers in the world has lost 34% year to date and 54% over the past year. This stock ranked 1st on our list of the best 10 Best Lithium and Battery Stocks to Buy Now.

However, while lithium has tumbled, copper has soared. Copper futures that trade on the COMEX are up by 17.8% year to date and 21% over the past year. This surge has come on the back of several catalysts. One of these, unsurprisingly, is AI. AI and the global push to electrification can add 10 million tons of copper demand over the next decade with one third attributed to the electric vehicle industry. Another third is for electricity generation and associated use cases, while the remaining is expected to stem from AI and data centers. Copper stocks in LME registered warehouses dropped by 35% in May from October, and a tighter market leads to higher prices which are beneficial for copper companies.

The next two metals, aluminum and iron, are also interlinked with industrial production. This leaves them highly sensitive to interest rates, and also reduces the impact of the tailwind from electrification. Therefore, iron ore prices have continued to remain volatile this year, as after dropping by 4,1% on July 10th, it surged by 3.6% on the 11th. This surge came as Chinese homebuilding activity continues to decline, and Goldman Sachs isn't too optimistic for the prices as it expects them to sit at $100 per ton this year. The bank expects aluminum prices to sit at $1.27 per pound by 2024 end, up from the $1.24 per pound as of July.

Looking at the broader determinants of materials stock performance, while they offer the potential of earning dividends, a chance to 'peg' the portfolio to economic growth, and enable risk hedging, there can be some drawbacks as well. Materials stocks are highly sensitive to business cycles due to their close link with the broader economic performance (you can learn more about the different stages of the business cycle by checking out 10 Best Consumer Cyclical Stocks To Buy Now). These stocks are also tied to the price of materials, so if lithium prices fall due to a supply glut, then companies that mine lithium can suffer too. Finally, geopolitical crises (such as the one in the Middle East) and regulations on industries such as mining can also act as headwinds.

Adding to this performance, the current economic environment isn't particularly favorable for materials stocks. Not only are interest rates high, but estimates show that we might be in the late stages of the business cycle where economic activity tapers off. Taking a look at the performance of materials stock indexes made of stocks part of the S&P and Dow Jones, and one operated by Morningstar Financial shows limited gains. The three indexes are up by 6%, 3.99%, and 9.89% over the past 12 months, respectively. Year to date, these stock indexes have gained 3.13%, 1.32%, and 1.71%. All three materials stock indexes had bottomed out in October 2023. October was one of the most important months for the stock market, as it came with a fresh set of comments from Fed Chairman Jerome Powell who indicated that additional interest rate hikes might be needed to balance out the labor market and control inflation. Investors, on the other hand, had expected the Fed's interest rate hiking cycle to close. However, as Chair Powell's remarks turned out to be too cautious and no interest rate hikes followed, the materials stock indexes continued to post gains.

Summing it up, while Wall Street is far more pessimistic about the Fed's rate cuts in the second half of 2024 compared to the first half, the one thing that everyone can agree on is that rate cuts will take place. Considering the factors that affect materials stock performance that we've discussed above, it might be worth it to see what the hedge funds are doing. We've done so today, so read on below to see the best materials stocks to buy according to hedge funds.

Our Methodology

To make our list of the best materials stocks to buy according to hedge funds, we ranked the 40 most valuable materials stocks in terms of market capitalization by the number of hedge funds that had bought the shares in Q1 2024. Then, we looked at popular materials ETFs to further refine the list, and ranked the stocks in them by the number of hedge funds too. The materials stocks with the highest number of hedge fund investors were chosen.

We also mentioned the number of hedge funds that had bought these stocks during the same filing period. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

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

Freeport-McMoRan Inc. (NYSE:FCX)

Number of Hedge Fund Investors in Q1 2024: 86

Freeport-McMoRan Inc. (NYSE:FCX) is a metals miner that focuses primarily on copper. Its Grasberg mine is one of the world's biggest mines, which provides Freeport-McMoRan Inc. (NYSE:FCX) a great opportunity to capitalize on any growing demand. The site, coupled with others allows the firm to gain an early foothold in the market which is notorious for high set up costs and long lead times. These mean that Freeport-McMoRan Inc. (NYSE:FCX)'s potential customers might take years to reach profitability or production, allowing the firm to establish key industrial partnerships. At the same time, since the firm's markets are tied to economic output, while high rates affect end demand, any potential cuts also carry the potential to inject fresh life into the shares. This was evident in July 2024 when the June payrolls report showed that the data for May was revised downward by 54,000 – bolstering the view for a Fed interest rate cuts. As a result, Freeport-McMoRan Inc. (NYSE:FCX)'s stock jumped by more than 1%.

As for its copper projects, here's what Freeport-McMoRan Inc. (NYSE:FCX)'s management had to say during the Q1 2024 earnings call:

Moving to copper markets, starting on Slide 6, the growing intensity of use of copper in the global economy is supported by secular trends, particularly in electrification. Copper is a foundational, essential metal when it comes to electrification, and the world is becoming more and more focused on copper-intensive energy applications. New massive investment in the power grid, renewable generation, technology infrastructure and transportation are driving increased demand for copper and forecasts call for above-trend growth and demand for the foreseeable future.

This is occurring at a time when there are constraints on existing supplies, an absence of major new copper development projects and extended multiyear lead times for supply development, pointing to tight market conditions for an extended period of time. Copper producers, including us, at Freeport have been citing physical market tightness for some time. And in the last several weeks, the copper price has risen to reflect the reality of the market situation. Based on historical periods of above trend growth in demand, we may be in the early stages of a repricing for long-term copper prices. And we illustrate this on Slide 7, where we show how copper prices responded 20 years ago when China emerged as a major consumer of copper. You can see on this chart that within 12 months, the copper price increased by 40% and was up nearly four times within a three-year period.

During 2023, the secular drivers for copper demand provide a growth in demand despite weakness in some of the more cyclical drivers of copper demand. In the fourth quarter of last year, industry announcements of sizable supply disruptions tightened the market significantly. This is clearly evident when you look at the physical concentrate markets where smelters drop TC, treatment charges, sharply as a result of the shortage of concentrate supply. Notably, recent manufacturing data points also indicate that the global economy is recovering. Recently improved macroeconomic sentiment, combined with physical market conditions have driven prices higher, copper prices higher year-to-date, and many analysts are now projecting significantly higher copper prices in the future.

Overall FCX ranks 1st on our list of the best materials stocks to buy. You can visit 10 Best Materials Stocks to Buy According to Hedge Funds to see the other materials stocks that are on hedge funds’ radar. While we acknowledge the potential of FCX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FCX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Disclosure: None. This article is originally published at Insider Monkey.

The most recent trading session ended with Southern Copper (SCCO) standing at $109.89, reflecting a -1.71% shift from the previouse trading day's closing. This change lagged the S&P 500's 1.39% loss on the day. Elsewhere, the Dow gained 0.6%, while the tech-heavy Nasdaq lost 2.77%.

The miner's shares have seen an increase of 3.51% over the last month, surpassing the Basic Materials sector's gain of 2.27% and falling behind the S&P 500's gain of 4.43%.

The investment community will be paying close attention to the earnings performance of Southern Copper in its upcoming release. In that report, analysts expect Southern Copper to post earnings of $1.16 per share. This would mark year-over-year growth of 65.71%. In the meantime, our current consensus estimate forecasts the revenue to be $2.93 billion, indicating a 27.25% growth compared to the corresponding quarter of the prior year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $4.33 per share and a revenue of $11.46 billion, indicating changes of +39.23% and +15.77%, respectively, from the former year.

Any recent changes to analyst estimates for Southern Copper should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about 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, 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. Within the past 30 days, our consensus EPS projection has moved 2.96% higher. Southern Copper is currently sporting a Zacks Rank of #2 (Buy).

In the context of valuation, Southern Copper is at present trading with a Forward P/E ratio of 25.82. This valuation marks a premium compared to its industry's average Forward P/E of 22.29.

It is also worth noting that SCCO currently has a PEG ratio of 1.13. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. SCCO's industry had an average PEG ratio of 0.75 as of yesterday's close.

The Mining – Non Ferrous industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 27, which puts it in the top 11% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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Southern Copper Corporation (SCCO) : Free Stock Analysis Report

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(Bloomberg) — Two Chinese copper smelters have laid out plans to reduce production next year as an imbalance between mine supply and smelting capacity continues to drive down processing margins.

Most Read from Bloomberg Businessweek

What are the early trends we should look for to identify a stock that could multiply in value over the long term? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. With that in mind, we've noticed some promising trends at Freeport-McMoRan (NYSE:FCX) so let's look a bit deeper.

Understanding Return On Capital Employed (ROCE)

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for Freeport-McMoRan:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)

0.13 = US$6.2b ÷ (US$54b – US$6.3b) (Based on the trailing twelve months to March 2024).

Thus, Freeport-McMoRan has an ROCE of 13%. On its own, that's a standard return, however it's much better than the 8.8% generated by the Metals and Mining industry.

View our latest analysis for Freeport-McMoRan

roce

Above you can see how the current ROCE for Freeport-McMoRan compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Freeport-McMoRan for free.

What The Trend Of ROCE Can Tell Us

Freeport-McMoRan is displaying some positive trends. Over the last five years, returns on capital employed have risen substantially to 13%. Basically the business is earning more per dollar of capital invested and in addition to that, 27% more capital is being employed now too. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.

The Key Takeaway

A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Freeport-McMoRan has. Since the stock has returned a staggering 365% to shareholders over the last five years, it looks like investors are recognizing these changes. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist.

One more thing, we've spotted 2 warning signs facing Freeport-McMoRan that you might find interesting.

While Freeport-McMoRan may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Wall Street expects a year-over-year increase in earnings on higher revenues when Freeport-McMoRan (FCX) reports results for the quarter ended June 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on July 23, 2024, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus Estimate

This mining company is expected to post quarterly earnings of $0.38 per share in its upcoming report, which represents a year-over-year change of +8.6%.

Revenues are expected to be $6 billion, up 4.5% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has been revised 3.2% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Earnings Whisper

Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model — the Zacks Earnings ESP (Expected Surprise Prediction) — has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. 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.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Freeport-McMoRan?

For Freeport-McMoRan, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +2.21%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination indicates that Freeport-McMoRan will most likely beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Freeport-McMoRan would post earnings of $0.27 per share when it actually produced earnings of $0.32, delivering a surprise of +18.52%.

Over the last four quarters, the company has beaten consensus EPS estimates four times.

Bottom Line

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Freeport-McMoRan appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Earnings are arguably the most important single number on a company's quarterly financial report. Wall Street clearly dives into all of the other metrics and management's input, but the EPS figure helps cut through all the noise.

The earnings figure itself is key, but a beat or miss on the bottom line can sometimes be just as, if not more, important. Therefore, investors should consider paying close attention to these earnings surprises, as a big beat can help a stock climb even higher.

2 Stocks to Add to Your Watchlist

The Zacks Earnings ESP, or Expected Surprise Prediction, aims to find earnings surprises by focusing on the most recent analyst revisions. The basic premise is that if an analyst reevaluates their earnings estimate ahead of an earnings release, it means they likely have new information that could possibly be more accurate. The core of the ESP model is comparing the Most Accurate Estimate to the Zacks Consensus Estimate, where the resulting percentage difference between the two equals the Expected Surprise Prediction.

The last thing we will do today, now that we have a grasp on the ESP and how powerful of a tool it can be, is to look at a qualifying stock. Pan American Silver (PAAS) holds a Zacks Rank #2 at the moment and its Most Accurate Estimate comes in at $0.13 a share 26 days away from its upcoming earnings release on August 7, 2024.

PAAS has an Earnings ESP figure of 9.35%, which, as explained above, is calculated by taking the percentage difference between the $0.13 Most Accurate Estimate and the Zacks Consensus Estimate of $0.12.

PAAS is part of a big group of Basic Materials stocks that boast a positive ESP, and investors may want to take a look at Southern Copper (SCCO) as well.

Slated to report earnings on August 6, 2024, Southern Copper holds a #2 (Buy) ranking on the Zacks Rank, and it's Most Accurate Estimate is $1.27 a share 25 days from its next quarterly update.

Southern Copper's Earnings ESP figure currently stands at 9.96% after taking the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $1.16.

PAAS and SCCO's positive ESP figures tell us that both stocks have a good chance at beating analyst expectations in their next earnings report.

Find Stocks to Buy or Sell Before They're Reported

Use the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>

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Southern Copper Corporation (SCCO) : Free Stock Analysis Report

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Key Insights

Freeport-McMoRan's estimated fair value is US$94.42 based on 2 Stage Free Cash Flow to Equity
Freeport-McMoRan is estimated to be 45% undervalued based on current share price of US$51.51
The US$55.24 analyst price target for FCX is 41% less than our estimate of fair value

Today we will run through one way of estimating the intrinsic value of Freeport-McMoRan Inc. (NYSE:FCX) by taking the expected future cash flows and discounting them to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. There's really not all that much to it, even though it might appear quite complex.

We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. 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.

Check out our latest analysis for Freeport-McMoRan

The Calculation

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. In the first stage we need to estimate the cash flows to the business over the next ten years. 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.

A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:

10-year free cash flow (FCF) forecast

	2025	2026	2027	2028	2029	2030	2031	2032	2033	2034
Levered FCF ($, Millions)	US$4.03b	US$5.85b	US$6.27b	US$7.08b	US$7.68b	US$8.20b	US$8.64b	US$9.03b	US$9.38b	US$9.70b
Growth Rate Estimate Source	Analyst x6	Analyst x4	Analyst x1	Analyst x1	Est @ 8.54%	Est @ 6.69%	Est @ 5.40%	Est @ 4.49%	Est @ 3.86%	Est @ 3.42%
Present Value ($, Millions) Discounted @ 7.8%	US$3.7k	US$5.0k	US$5.0k	US$5.2k	US$5.3k	US$5.2k	US$5.1k	US$5.0k	US$4.8k	US$4.6k

("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$49b

We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.4%. We discount the terminal cash flows to today's value at a cost of equity of 7.8%.

Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$9.7b× (1 + 2.4%) ÷ (7.8%– 2.4%) = US$184b

Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$184b÷ ( 1 + 7.8%)10= US$87b

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$136b. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of US$51.5, the company appears quite good value at a 45% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope – move a few degrees and end up in a different galaxy. Do keep this in mind.

dcfThe Assumptions

We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. 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 1.176. 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

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

Looking Ahead:

Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. What is the reason for the share price sitting below the intrinsic value? For Freeport-McMoRan, we've compiled three essential factors you should further research:

Risks: For example, we've discovered 2 warning signs for Freeport-McMoRan that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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.

Shares of this mining company have returned +4.9% over the past month versus the Zacks S&P 500 composite's +5.1% change. The Zacks Mining – Non Ferrous industry, to which Freeport-McMoRan belongs, has gained 4.6% over this period. Now the key question is: Where could the stock be headed in the near term?

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

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.

Freeport-McMoRan is expected to post earnings of $0.40 per share for the current quarter, representing a year-over-year change of +14.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.2%.

For the current fiscal year, the consensus earnings estimate of $1.69 points to a change of +9.7% from the prior year. Over the last 30 days, this estimate has changed -1.2%.

For the next fiscal year, the consensus earnings estimate of $2.32 indicates a change of +37.3% from what Freeport-McMoRan is expected to report a year ago. Over the past month, the estimate has changed -0.3%.

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

12-month consensus EPS estimate for FCX _12MonthEPSChartUrl

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.

In the case of Freeport-McMoRan, the consensus sales estimate of $6.22 billion for the current quarter points to a year-over-year change of +8.4%. The $25.31 billion and $26.06 billion estimates for the current and next fiscal years indicate changes of +10.8% and +3%, respectively.

Last Reported Results and Surprise History

Freeport-McMoRan reported revenues of $6.32 billion in the last reported quarter, representing a year-over-year change of +17.3%. EPS of $0.32 for the same period compares with $0.52 a year ago.

Compared to the Zacks Consensus Estimate of $5.66 billion, the reported revenues represent a surprise of +11.74%. The EPS surprise was +18.52%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time 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.

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

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

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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The latest trading session saw Southern Copper (SCCO) ending at $114.59, denoting a -1.5% adjustment from its last day's close. The stock trailed the S&P 500, which registered a daily loss of 0.88%. Meanwhile, the Dow gained 0.08%, and the Nasdaq, a tech-heavy index, lost 1.95%.

Prior to today's trading, shares of the miner had gained 7.65% over the past month. This has outpaced the Basic Materials sector's loss of 2.77% and the S&P 500's gain of 5.11% in that time.

The investment community will be paying close attention to the earnings performance of Southern Copper in its upcoming release. On that day, Southern Copper is projected to report earnings of $1.16 per share, which would represent year-over-year growth of 65.71%. Meanwhile, our latest consensus estimate is calling for revenue of $2.93 billion, up 27.14% from the prior-year quarter.

SCCO's full-year Zacks Consensus Estimates are calling for earnings of $4.33 per share and revenue of $11.46 billion. These results would represent year-over-year changes of +39.23% and +15.77%, respectively.

Investors might also notice recent changes to analyst estimates for Southern Copper. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 5.43% upward. Southern Copper is currently a Zacks Rank #2 (Buy).

In terms of valuation, Southern Copper is presently being traded at a Forward P/E ratio of 26.87. Its industry sports an average Forward P/E of 16.12, so one might conclude that Southern Copper is trading at a premium comparatively.

Meanwhile, SCCO's PEG ratio is currently 1.18. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Mining – Non Ferrous industry had an average PEG ratio of 0.79 as trading concluded yesterday.

The Mining – Non Ferrous industry is part of the Basic Materials sector. This industry, currently bearing a Zacks Industry Rank of 66, finds itself in the top 27% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SCCO in the coming trading sessions, be sure to utilize Zacks.com.

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The most recent trading session ended with Freeport-McMoRan (FCX) standing at $51.51, reflecting a -0.16% shift from the previouse trading day's closing. The stock exceeded the S&P 500, which registered a loss of 0.88% for the day. Meanwhile, the Dow experienced a rise of 0.08%, and the technology-dominated Nasdaq saw a decrease of 1.95%.

The the stock of mining company has risen by 4.86% in the past month, leading the Basic Materials sector's loss of 2.77% and undershooting the S&P 500's gain of 5.11%.

The investment community will be paying close attention to the earnings performance of Freeport-McMoRan in its upcoming release. The company is slated to reveal its earnings on July 23, 2024. The company's earnings per share (EPS) are projected to be $0.40, reflecting a 14.29% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $6.22 billion, indicating an 8.4% increase compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.69 per share and a revenue of $25.31 billion, representing changes of +9.74% and +10.75%, respectively, from the prior year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Freeport-McMoRan. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 1.19% fall in the Zacks Consensus EPS estimate. Freeport-McMoRan is holding a Zacks Rank of #3 (Hold) right now.

In the context of valuation, Freeport-McMoRan is at present trading with a Forward P/E ratio of 30.5. This denotes a premium relative to the industry's average Forward P/E of 16.12.

Meanwhile, FCX's PEG ratio is currently 2.15. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Mining – Non Ferrous industry had an average PEG ratio of 0.79.

The Mining – Non Ferrous industry is part of the Basic Materials sector. This industry, currently bearing a Zacks Industry Rank of 66, finds itself in the top 27% echelons of all 250+ industries.

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.

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

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Antofagasta's (LON:ANTO) stock up by 1.5% over the past week. Since the market usually pay for a company’s long-term financial health, we decided to study the company’s fundamentals to see if they could be influencing the market. In this article, we decided to focus on Antofagasta's ROE.

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. Put another way, it reveals the company's success at turning shareholder investments into profits.

Check out our latest analysis for Antofagasta

How Do You Calculate Return On Equity?

Return on equity can be calculated by using the formula:

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

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

11% = US$1.3b ÷ US$12b (Based on the trailing twelve months to December 2023).

The 'return' is the profit over the last twelve months. That means that for every £1 worth of shareholders' equity, the company generated £0.11 in profit.

Why Is ROE Important For Earnings Growth?

So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.

Antofagasta's Earnings Growth And 11% ROE

To begin with, Antofagasta seems to have a respectable ROE. And on comparing with the industry, we found that the the average industry ROE is similar at 9.5%. This certainly adds some context to Antofagasta's exceptional 23% net income growth seen over the past 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 13% in the same 5-year period.

past-earnings-growth

Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. 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 Efficiently Re-investing Its Profits?

Antofagasta has a significant three-year median payout ratio of 73%, meaning the company only retains 27% of its income. This implies that the company has been able to achieve high earnings growth despite returning most of its profits to shareholders.

Moreover, Antofagasta is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years. Our latest analyst data shows that the future payout ratio of the company is expected to drop to 42% over the next three years. Regardless, the ROE is not expected to change much for the company despite the lower expected payout ratio.

Conclusion

Overall, we are quite pleased with Antofagasta's performance. We are particularly impressed by the considerable earnings growth posted by the company, which was likely backed by its high ROE. While the company is paying out most of its earnings as dividends, it has been able to grow its earnings in spite of it, so that's probably a good sign. That being so, a study of the latest analyst forecasts show that the company is expected to see a slowdown in its future earnings growth. 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.

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For Immediate Release

Chicago, IL – July 10, 2024 – Today, Zacks Equity Research discusses Southern Copper Corp. SCCO, Freeport-McMoRan Inc. FCX, Lundin Mining LUNMF, Coeur Mining CDE and Ero Copper ERO.

Industry: Mining – Non-Ferrous

Link: https://www.zacks.com/commentary/2298570/5-non-ferrous-metal-mining-stocks-to-watch-in-a-promising-industry

We suggest keeping a close eye on companies like Southern Copper Corp., Freeport-McMoRan Inc., Lundin Mining, Coeur Mining and Ero Copper. These companies are strategically focused on building reserves, technological investments, cost control and enhancing production efficiency, positioning them well to capitalize on the industry's growth potential.

About the Industry

Mining is a long, complex and capital-intensive process. Significant exploration and development to evaluate the size of the deposit, followed by the assessment of ways to extract and process ore efficiently, safely and responsibly, precede the actual mining operations. Miners continuously seek opportunities to grow their reserves and resources through targeted near-mine exploration and business development. They strive to upgrade and improve the quality of their existing assets internally and through acquisitions.

What's Shaping the Future of the Mining – Non Ferrous Industry?

Backed by these factors, silver prices are currently around $31 an ounce, yielding a 29.7% year-to-date gain. Silver prices have also gained support on expectations that China will unveil more stimulus measures and demand from the solar panel sector. Uranium prices are currently at $86 per pound, the highest in two weeks, amid robust demand and tight supply. The United States and 20 other countries intend to triple their nuclear power by 2050.

Meanwhile, investors continue to assess the impacts of the U.S. ban on Russian nuclear fuel imports may have on the global supply chains. Overall, industry players are dealing with depleting resources, declining supply in old mines and a lack of new mines. Development projects are inherently risky and capital-intensive. While demand has been strong, there will be an eventual deficit in metal supply, leading to a situation that will bolster metal prices. This, in turn, will favor the industry in the long haul.

Efforts Underway to Sustain Margins Amid High Costs: The industry has been facing a shortage of skilled workforce lately, which has hiked wages. Industry players have also been grappling with escalating production costs, including electricity, water and materials, as well as higher freight expenses and supply-chain issues. Since the industry cannot control the prices of its products, it focuses on improving sales volumes, increasing operating cash flows and lowering unit net cash costs. Industry participants are opting for alternative energy sources to minimize fuel-price volatility and secure supply. Miners are now committed to cost-reduction strategies and digital innovation to drive operating efficiencies.

Strong Demand to Support Industry: The demand for non-ferrous metals will remain high in the future, given their wide use in primary sectors, including transportation, electricity, construction, telecommunication, energy and information technology. The demand for electric vehicles and renewable energy is expected to be a significant growth driver for metals like copper and nickel in the years to come. The plan to overhaul and upgrade the nation’s infrastructure, and promote green policies, per the U.S. Infrastructure Investment and Jobs Act, will also require a massive amount of non-ferrous metals.

Zacks Industry Rank Indicates Bright Prospects

Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Since the beginning of this year, the industry’s earnings estimates for the current year have been revised upward by 15%.

Before we present a few stocks that you may want to consider for your portfolio, let us look at the industry’s recent stock-market performance and its valuation picture.

Industry Versus S&P 500 & Sector

The Zacks Mining- Non Ferrous Industry has outperformed its sector and the Zacks S&P 500 composite over the past 12 months. The stocks in this industry have collectively gained 45.4% in the past year compared with the Zacks Basic Materials sector’s rise of 3.4%. The S&P 500 has grown 27.7% in the said time frame.

Industry's Current Valuation

Based on the forward 12-month EV/EBITDA ratio, a commonly used multiple for valuing Mining- Non Ferrous stocks, we see that the industry is currently trading at 7.8X compared with the S&P 500’s 15.11X. The Basic Materials sector’s trailing 12-month EV/EBITDA is at 7.03X.

Over the last five years, the industry traded as high as 9.36X and as low as 3.35X, the median being 6.57X.

5 Mining – Non Ferrous Stocks to Keep a Tab on

Copper production from the Tucumã Operations is anticipated between 17,000 and 25,000 tons in the second half of 2024. For 2025, production is projected at 53,000-58,000, marking Tucumã’s first full year of production. The Caraíba mill expansion, which is expected to increase mill throughput capacity from 3.2 million tons per year to 4.2 million tons per year, was completed in December 2023.

The Xavantina operations achieved record gold production in the first quarter of 2024, driven by favorable grade reconciliations that have continued into the second quarter. Backed by this, ERO raised its guidance for 2024 gold production to 60,000-65,000 ounces from the prior stated 55,000-60,000 ounces. ERO is on track to double copper production to more than 100,000 tons in 2025. ERO shares have gained 41% in the past six months.

The Zacks Consensus Estimate for the Vancouver, Canada-based company’s fiscal 2024 earnings indicates year-over-year growth of 95.4%. The estimate has moved up 9% in the past 90 days. The company has a trailing four-quarter earnings surprise of 53.9%, on average. ERO currently sports a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

While maintaining a focus on growth plans and capital allocation, the company is committed to optimizing assets and operational efficiencies to drive down costs. Exploration efforts, with a $48-million budget for 2024, include drilling campaigns at Caserones, Josemaria, Chapada and Zinkgruvan, targeting various high-potential areas and extensions to existing deposits. LUNMF shares have gained 45.7% in the past six months.

The Zacks Consensus Estimate for Vancouver, Canada-based LUNMF’s fiscal 2024 earnings suggests a year-over-year improvement of 91%. The consensus estimate has moved up 42% in the past 90 days. It has a long-term estimated earnings growth rate of 48.1%. The company currently carries a Zacks Rank #2 (Buy).

The company’s capital investment program for this decade exceeds $15 billion and includes investments at the Buenavista Zinc, Pilares, El Pilar and El Arco projects in Mexico, and the Tia Maria, Los Chancas and Michiquillay projects in Peru. Given its constant commitment to increasing low-cost production and growth investments, the company is well-poised to continue delivering an enhanced performance. SCCO shares gained 41.3% in the last six months.

The Zacks Consensus Estimate for the Phoenix, AZ-based company’s fiscal 2024 earnings suggests year-over-year growth of 39%. The estimate has moved up 26% over the past 90 days. SCCO has a long-term estimated earnings growth rate of 22.8%. The company currently carries a Zacks Rank #2.

Production from Safford/Lone Star is approaching 300 million pounds of copper annually, ahead of the initial plan to produce more than 200 million pounds per year. FCX is ramping up underground production at Grasberg in Indonesia, increasing milling rates. It is on track with its smelter projects in Indonesia (the Manyar smelter and precious metals refinery projects) and achieved a 92% completion milestone at the end of the first quarter of 2024.

PT-FI completed a project to install additional milling facilities in December 2023 that would increase its milling capacity to roughly 240,000 metric tons of ore per day. The company’s focus on cost management and lowering debt levels is commendable. FCX shares have gained 23.8% in the past six months.

The Zacks Consensus Estimate for the company’s earnings for fiscal 2024 has moved up 3.6% over the past 60 days. The estimate indicates year-over-year growth of 11.7%. FCX has a trailing four-quarter earnings surprise of 23.5%, on average. It has a long-term estimated earnings growth rate of 14.2%. The Phoenix, AZ-based company currently carries a Zacks Rank #3 (Hold).

Once fully operational, throughput levels are estimated to be 2.5 times higher than in the past, making Rochester one of the world's largest open-pit heap leach operations. It is expected to be America's largest source of domestically produced and processed silver and will be a key driver of CDE's cash flow growth.

In June, the company reported results from its multi-year exploration drilling and development program at the Kensington underground gold mine, which is encouraging with high grades and wide intercepts encountered in Elmira South, and Upper and Lower Kensington. The findings affirm that the project is well-positioned for a return to a sustained period of free cash flow generation and to be an important contributor to Coeur’s U.S.-centric portfolio of long-lived mines in North America. Backed by these developments, the company’s shares have gained 139% in the past six months.

This Chicago, IL-based company explores, develops and produces gold, silver, zinc and lead properties, with five operations in the United States, Mexico and Canada. The Zacks Consensus Estimate for CDE’s fiscal 2024 earnings suggests a year-over-year improvement of 134.8%. The consensus estimate has moved up to an earnings per share of 8 cents from the expected loss of 5 cents 90 days ago. The company currently carries a Zacks Rank #3.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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

Southern Copper Corporation (SCCO) : Free Stock Analysis Report

Coeur Mining, Inc. (CDE) : Free Stock Analysis Report

Lundin Mining Corp. (LUNMF) : Free Stock Analysis Report

Ero Copper Corp. (ERO) : Free Stock Analysis Report

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Zacks Investment Research

The prospects of the Zacks Mining – Non Ferrous industry appear promising at the moment, backed by the upward trajectory in metal prices. The demand for non-ferrous metals is expected to be supported by the energy-transition trend, which will buoy the industry.We suggest keeping a close eye on companies like Southern Copper Corporation SCCO, Freeport-McMoRan Inc. FCX, Lundin Mining LUNMF, Coeur Mining CDE and Ero Copper ERO. These companies are strategically focused on building reserves, technological investments, cost control and enhancing production efficiency, positioning them well to capitalize on the industry's growth potential.

About the Industry

The Zacks Mining – Non Ferrous industry comprises companies that produce non-ferrous metals, including copper, gold, silver, cobalt, molybdenum, zinc, aluminum and uranium. These metals are utilized by various industries, including aerospace, automotive, packaging, construction, machinery, electronics, transportation, jewelry, chemical and nuclear energy. Mining is a long, complex and capital-intensive process. Significant exploration and development to evaluate the size of the deposit, followed by the assessment of ways to extract and process ore efficiently, safely and responsibly, precede the actual mining operations. Miners continuously seek opportunities to grow their reserves and resources through targeted near-mine exploration and business development. They strive to upgrade and improve the quality of their existing assets internally and through acquisitions.

What's Shaping the Future of the Mining – Non Ferrous Industry?

Improving Metal Prices to Aid Industry: Copper prices have notched gains of more than 18.8% so far this year, aided by supply concerns and signs of improving demand from top consumer China. Gold has appreciated 14.5% so far this year. Gold prices are currently around $2,360 an ounce following key U.S. jobs data that showed a softening labor market, fueling expectations of interest rate cuts in September. Backed by these factors, silver prices are currently around $31 an ounce, yielding a 29.7% year-to-date gain. Silver prices have also gained support on expectations that China will unveil more stimulus measures and demand from the solar panel sector. Uranium prices are currently at $86 per pound, the highest in two weeks, amid robust demand and tight supply. The United States and 20 other countries intend to triple their nuclear power by 2050. Meanwhile, investors continue to assess the impacts of the U.S. ban on Russian nuclear fuel imports may have on the global supply chains. Overall, industry players are dealing with depleting resources, declining supply in old mines and a lack of new mines. Development projects are inherently risky and capital-intensive. While demand has been strong, there will be an eventual deficit in metal supply, leading to a situation that will bolster metal prices. This, in turn, will favor the industry in the long haul.Efforts Underway to Sustain Margins Amid High Costs: The industry has been facing a shortage of skilled workforce lately, which has hiked wages. Industry players have also been grappling with escalating production costs, including electricity, water and materials, as well as higher freight expenses and supply-chain issues. Since the industry cannot control the prices of its products, it focuses on improving sales volumes, increasing operating cash flows and lowering unit net cash costs. Industry participants are opting for alternate energy sources to minimize fuel-price volatility and secure supply. Miners are now committed to cost-reduction strategies and digital innovation to drive operating efficiencies.Strong Demand to Support Industry: The demand for non-ferrous metals will remain high in the future, given their wide use in primary sectors, including transportation, electricity, construction, telecommunication, energy and information technology. The demand for electric vehicles and renewable energy is expected to be a significant growth driver for metals like copper and nickel in the years to come. The plan to overhaul and upgrade the nation’s infrastructure, and promote green policies, per the U.S. Infrastructure Investment and Jobs Act, will also require a massive amount of non-ferrous metals.

Zacks Industry Rank Indicates Bright Prospects

The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bright prospects for the near term. The Zacks Mining – Non Ferrous industry, an 11-stock group within the broader Zacks Basic Materials Sector, currently carries a Zacks Industry Rank #63, which places it in the top 25% of 250 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Since the beginning of this year, the industry’s earnings estimates for the current year have been revised upward by 15%.Before we present a few stocks that you may want to consider for your portfolio, let us look at the industry’s recent stock-market performance and its valuation picture.

Industry Versus S&P 500 & Sector

One-Year Price Performance

Industry's Current Valuation

Enterprise Value/EBITDA (EV/EBITDA) Ratio (F12M)Enterprise Value/EBITDA (EV/EBITDA) Ratio (F12M)

Over the last five years, the industry traded as high as 9.36X and as low as 3.35X, the median being 6.57X.

5 Mining – Non Ferrous Stocks to Keep a Tab on

Ero Copper: The company has been progressing with its strategic initiatives, which will drive significant near-term growth. In June, the company received the operational license for the Tucumã Project, thus clearing the last remaining approval necessary for commercial operation. First concentrate is expected early in the third quarter of 2024. Copper production from the Tucumã Operations is anticipated between 17,000 and 25,000 tons in the second half of 2024. For 2025, production is projected at 53,000-58,000, marking Tucumã’s first full year of production. The Caraíba mill expansion, which is expected to increase mill throughput capacity from 3.2 million tons per year to 4.2 million tons per year, was completed in December 2023. The Xavantina operations achieved record gold production in the first quarter of 2024, driven by favorable grade reconciliations that have continued into the second quarter. Backed by this, ERO raised its guidance for 2024 gold production to 60,000-65,000 ounces from the prior stated 55,000-60,000 ounces. ERO is on track to double copper production to more than 100,000 tons in 2025. ERO shares have gained 41% in the past six months.The Zacks Consensus Estimate for the Vancouver, Canada-based company’s fiscal 2024 earnings indicates year-over-year growth of 95.4%. The estimate has moved up 9% in the past 90 days. The company has a trailing four-quarter earnings surprise of 53.9%, on average. ERO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Price: ERO

Lundin Mining: The company increased its stake in the Caserones copper mine to 70% on Jul 2, 2024, resulting in an additional 120,000-130,000 tons of copper being added to its production profile on a 100% basis. This move adds a long-life asset in a tier-one jurisdiction strategically located in the Vicuña District, solidifying LUNMF’s position as a meaningful copper producer globally. While maintaining a focus on growth plans and capital allocation, the company is committed to optimizing assets and operational efficiencies to drive down costs. Exploration efforts, with a $48-million budget for 2024, include drilling campaigns at Caserones, Josemaria, Chapada and Zinkgruvan, targeting various high-potential areas and extensions to existing deposits. LUNMF shares have gained 45.7% in the past six months.The Zacks Consensus Estimate for Vancouver, Canada-based LUNMF’s fiscal 2024 earnings suggests a year-over-year improvement of 91%. The consensus estimate has moved up 42% in the past 90 days. It has a long-term estimated earnings growth rate of 48.1%. The company currently carries a Zacks Rank #2 (Buy).

Price: LUNMF

Southern Copper: The company has the largest copper reserve in the industry and operates world-class assets in investment-grade countries, such as Mexico and Peru. SCCO expects copper production to rise 4% year over year and reach 948,800 tons in 2024. The company expects this growth to be driven by the Pilares project running at full capacity and ramp up of the Buenavista zinc concentrators. The company’s capital investment program for this decade exceeds $15 billion and includes investments at the Buenavista Zinc, Pilares, El Pilar and El Arco projects in Mexico, and the Tia Maria, Los Chancas and Michiquillay projects in Peru. Given its constant commitment to increasing low-cost production and growth investments, the company is well-poised to continue delivering an enhanced performance. SCCO shares gained 41.3% in the last six months.The Zacks Consensus Estimate for the Phoenix, AZ-based company’s fiscal 2024 earnings suggests year-over-year growth of 39%. The estimate has moved up 26% over the past 90 days. SCCO has a long-term estimated earnings growth rate of 22.8%. The company currently carries a Zacks Rank #2.

Price: SCCO

Freeport-McMoRan: The company's efforts to expand reserves through exploration near existing mines will fuel growth. FCX is implementing the latest technologies and data analytics in leaching processes across its North America and South America operations. Initial results are providing incremental low-cost additions to FCX’s expected annual production and the potential to add to its reserves. Production from Safford/Lone Star is approaching 300 million pounds of copper annually, ahead of the initial plan to produce more than 200 million pounds per year. FCX is ramping up underground production at Grasberg in Indonesia, increasing milling rates. It is on track with its smelter projects in Indonesia (the Manyar smelter and precious metals refinery projects) and achieved a 92% completion milestone at the end of the first quarter of 2024. PT-FI completed a project to install additional milling facilities in December 2023 that would increase its milling capacity to roughly 240,000 metric tons of ore per day. The company’s focus on cost management and lowering debt levels is commendable. FCX shares have gained 23.8% in the past six months.The Zacks Consensus Estimate for the company’s earnings for fiscal 2024 has moved up 3.6% over the past 60 days. The estimate indicates year-over-year growth of 11.7%. FCX has a trailing four-quarter earnings surprise of 23.5%, on average. It has a long-term estimated earnings growth rate of 14.2%. The Phoenix, AZ-based company currently carries a Zacks Rank #3 (Hold).

Price: FCX

Coeur Mining: In April 2024, the company announced that its newly expanded Rochester silver and gold mine in Nevada achieved commercial production. The company expects 2024 production to be 4.8-6.6 million ounces of silver and 37,000-50,000 ounces of gold. Production is expected to gain from commissioning and ramp-up at Rochester. Once fully operational, throughput levels are estimated to be 2.5 times higher than in the past, making Rochester one of the world's largest open-pit heap leach operations. It is expected to be America's largest source of domestically produced and processed silver and will be a key driver of CDE's cash flow growth. In June, the company reported results from its multi-year exploration drilling and development program at the Kensington underground gold mine, which is encouraging with high grades and wide intercepts encountered in Elmira South, and Upper and Lower Kensington. The findings affirm that the project is well-positioned for a return to a sustained period of free cash flow generation and to be an important contributor to Coeur’s U.S.-centric portfolio of long-lived mines in North America. Backed by these developments, the company’s shares have gained 139% in the past six months.This Chicago, IL-based company explores, develops and produces gold, silver, zinc and lead properties, with five operations in the United States, Mexico and Canada. The Zacks Consensus Estimate for CDE’s fiscal 2024 earnings suggests a year-over-year improvement of 134.8%. The consensus estimate has moved up to an earnings per share of 8 cents from the expected loss of 5 cents 90 days ago. The company currently carries a Zacks Rank #3.

Price: CDE

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Southern Copper Corporation (SCCO) : Free Stock Analysis Report

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

Coeur Mining, Inc. (CDE) : Free Stock Analysis Report

Lundin Mining Corp. (LUNMF) : Free Stock Analysis Report

Ero Copper Corp. (ERO) : Free Stock Analysis Report

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Zacks Investment Research

Southern Copper and gold stock Agnico eagle surged above early buy points on hopeful signs for U.S. and China policy.

For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Southern Copper (SCCO) ten years ago? It may not have been easy to hold on to SCCO for all that time, but if you did, how much would your investment be worth today?

Southern Copper's Business In-Depth

With that in mind, let's take a look at Southern Copper's main business drivers.

Phoenix, AZ-based Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals. The company conducts exploration activities in Argentina, Chile, Ecuador, Mexico and Peru.

Southern Copper has the largest copper reserves in the industry and operates high-quality, world-class assets in investment grade countries, such as Mexico and Peru.

Southern Copper reports results under three reportable segments. Each consist of a groups of mines with similar economic characteristics, type of products, processes and support facilities, regulatory environments as well as employee bargaining contracts.Peruvian operations (around 36% of the company's revenues) includes the Toquepala and Cuajone mine complexes and the smelting and refining plants, industrial railroad and port facilities that service both mines. The Peruvian operations produce copper, with significant by-product production of molybdenum, silver and other materials.Mexican Open-Pit (58% of revenues) includes La Caridad and Buenavista mine complexes, the smelting and refining plants and support facilities, which service both mines. The Mexican open pit operations produce copper, with significant by-product production of molybdenum, silver and other materials.Mexican underground operations (6% of revenues) (IMMSA unit) includes five underground mines that produce zinc, lead, copper, silver and gold, a coal mine which produces coal and coke, and several industrial processing facilities for zinc, copper and silver.

The geographic breakdown of the company’s sales is as follows – Americas (50% of revenues), Europe (32%) and Asia (18%).Approximately 80% of the company’s revenue come from the sale of copper, 6% from molybdenum and 10% from silver and zinc.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Southern Copper ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in July 2014 would be worth $3,606.40, or a 260.64% gain, as of July 8, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 180.40% and gold's return of 73.86% over the same time frame.

Going forward, analysts are expecting more upside for SCCO.

Southern Copper expects copper production to be up 4.1% year over year and reach 948,800 tons in 2024 driven by the Pilares project running at full capacity and the Buenavista zinc concentrator ramp-up. However, the recent downtrend in copper prices due to weak demand in China and contraction in the manufacturing sector is concerning. The company has been witnessing higher labor costs, which along with ongoing inflation for repair materials and operating materials, are anticipated to hurt Southern Copper’s margins. The company’s cost-control measures are expected to somewhat offset this impact. The long-term prospects for copper remain positive, buoyed by U.S. infrastructure investment and global clean energy transition. With substantial copper reserves and strategic growth investments, the company is positioned for growth.

The stock has jumped 7.21% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2024; the consensus estimate has moved up as well.

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Zacks Investment Research

Investors looking for stocks in the Mining – Non Ferrous sector might want to consider either Lundin Mining (LUNMF) or Freeport-McMoRan (FCX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Lundin Mining and Freeport-McMoRan are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that LUNMF likely has seen a stronger improvement to its earnings outlook than FCX has recently. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

LUNMF currently has a forward P/E ratio of 13.95, while FCX has a forward P/E of 29.90. We also note that LUNMF has a PEG ratio of 0.29. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FCX currently has a PEG ratio of 2.11.

Another notable valuation metric for LUNMF is its P/B ratio of 1.42. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FCX has a P/B of 2.63.

These metrics, and several others, help LUNMF earn a Value grade of A, while FCX has been given a Value grade of C.

LUNMF has seen stronger estimate revision activity and sports more attractive valuation metrics than FCX, so it seems like value investors will conclude that LUNMF is the superior option right now.

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

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Zacks Investment Research

Wallbridge Mining Company Limited

TORONTO, June 27, 2024 (GLOBE NEWSWIRE) — Wallbridge Mining Company Limited (TSX:WM, OTCQB:WLBMF) (“Wallbridge” or the “Company”) held its Annual Meeting of Shareholders (the “Meeting”) on June 26, 2024.

A total of 375,770,677 shares or 36.98% of the outstanding shares of the Company were represented at the Meeting. All of the matters submitted to the shareholders for approval as set out in the Company's notice of meeting and management information circular dated May 17, 2024 (“MIC”) were approved by the requisite majority of votes cast at the Meeting.

Voting on the following matters, as described in the MIC, were as follows:

To Set the Number of Directors at Seven (7)

Votes For		Votes Against
Number	Percent	Number	Percent
327,860,364	87.25%	47,910,313	12.75%

Election of Directors for the Ensuing Year

The following directors were elected until the next annual meeting of shareholders or until their successors are otherwise duly elected or appointed: Brian Penny, Janet Wilkinson, Michael Pesner, Anthony Makuch, Jeffery Snow, Danielle Giovenazzo and Brian Christie.

	Votes For		Votes Withheld
	Number	Percent	Number	Percent
Brian Penny	307,933,143	87.647%	43,398,663	12.353%
Janet Wilkinson	325,213,100	92.566%	26,118,706	7.434%
Michael Pesner	289,152,398	82.302%	62,179,408	17.698%
Anthony Makuch	343,276,508	97.707%	8,055,298	2.293%
Jeffery Snow	345,531,527	98.349%	5,800,279	1.651%
Danielle Giovenazzo	289,089,828	82.284%	62,241,978	17.716%
Brian Christie	344,870,421	98.161%	6,461,385	1.839%

Appointment of KPMG LLP as Auditor of the Corporation for the ensuing year and authorizing the Directors to fix their remuneration

Votes For		Votes Withheld
Number	Percent	Number	Percent
373,296,489	99.342%	2,474,188	0.658%

About Wallbridge Mining

Wallbridge is focused on creating value through the exploration and sustainable development of gold projects along the Detour-Fenelon Gold Trend in Québec’s Northern Abitibi region while respecting the environment and communities where it operates.

Wallbridge’s most advanced projects, Fenelon Gold (“Fenelon”) and Martiniere Gold (“Martiniere”) incorporate a combined 3.05 million ounces of indicated gold resources and 2.35 million ounces of inferred gold resources. Fenelon and Martiniere are located within an 830 square kilometre exploration land package controlled by Wallbridge.

Wallbridge has reported a positive Preliminary Economic Assessment (“PEA”) at Fenelon that estimates average annual gold production of 212,000 ounces over 12 years.

Wallbridge also holds a 15.79% interest in the common shares of NorthX Nickel Corp. (formerly “Archer Exploration”) as a result of the sale of the Company’s portfolio of nickel assets in Ontario and Québec. For further information please visit the Company’s website at https://wallbridgemining.com/ or contact:

Wallbridge Mining Company Limited

Brian Penny, CPA, CMAChief Executive OfficerEmail: bpenny@wallbridgemining.comM: +1 416 716 8346

Victoria Vargas, B.Sc. (Hon.) Economics, MBACapital Markets AdvisorEmail: vvargas@wallbridgemining.comM: +1 289 242 3599

Cautionary Note Regarding Forward-Looking InformationThe information in this document may contain forward-looking statements or information (collectively, “FLI”) within the meaning of applicable Canadian securities legislation. FLI is based on expectations, estimates, projections and interpretations as at the date of this document.

All statements, other than statements of historical fact, included herein are FLI that involve various risks, assumptions, estimates and uncertainties. Generally, FLI can be identified by the use of statements that include, but are not limited to, words such as “seeks”, “believes”, “anticipates”, “plans”, “continues”, “budget”, “scheduled”, “estimates”, “expects”, “forecasts”, “intends”, “projects”, “predicts”, “proposes”, "potential", “targets” and variations of such words and phrases, or by statements that certain actions, events or results “may”, “will”, “could”, “would”, “should” or “might”, “be taken”, “occur” or “be achieved.”

FLI in this document may include, but is not limited to: statements regarding the results of the PEA; the potential future performance of the Common Shares; future drill results; the Company’s ability to convert inferred resources into measured and indicated resources; environmental matters; stakeholder engagement and relationships; parameters and methods used to estimate the MRE’s at Fenelon and Martiniere (collectively the “Deposits”); the prospects, if any, of the Deposits; future drilling at the Deposits; and the significance of historic exploration activities and results.

FLI is designed to help you understand management’s current views of its near- and longer-term prospects, and it may not be appropriate for other purposes. FLI by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such FLI. Although the FLI contained in this document is based upon what management believes, or believed at the time, to be reasonable assumptions, the Company cannot assure shareholders and prospective purchasers of securities of the Company that actual results will be consistent with such FLI, as there may be other factors that cause results not to be as anticipated, estimated or intended, and neither the Company nor any other person assumes responsibility for the accuracy and completeness of any such FLI. Except as required by law, the Company does not undertake, and assumes no obligation, to update or revise any such FLI contained in this document to reflect new events or circumstances. Unless otherwise noted, this document has been prepared based on information available as of the date of this document. Accordingly, you should not place undue reliance on the FLI, or information contained herein.

Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in FLI.

Assumptions upon which FLI is based, without limitation, include: the results of exploration activities, the Company’s financial position and general economic conditions; the ability of exploration activities to accurately predict mineralization; the accuracy of geological modelling; the ability of the Company to complete further exploration activities; the legitimacy of title and property interests in the Deposits; the accuracy of key assumptions, parameters or methods used to estimate the MREs and in the PEA; the ability of the Company to obtain required approvals; geological, mining and exploration technical problems; failure of equipment or processes to operate as anticipated; the evolution of the global economic climate; metal prices; foreign exchange rates; environmental expectations; community and non-governmental actions; and, the Company’s ability to secure required funding. Risks and uncertainties about Wallbridge's business are discussed in the disclosure materials filed with the securities regulatory authorities in Canada, which are available at www.sedarplus.ca.

Cautionary Notes to United States InvestorsWallbridge prepares its disclosure in accordance with NI 43-101 which differs from the requirements of the U.S. Securities and Exchange Commission (the "SEC"). Terms relating to mineral properties, mineralization and estimates of mineral reserves and mineral resources and economic studies used herein are defined in accordance with NI 43-101 under the guidelines set out in CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Council on May 19, 2014, as amended. NI 43-101 differs significantly from the disclosure requirements of the SEC generally applicable to US companies. As such, the information presented herein concerning mineral properties, mineralization and estimates of mineral reserves and mineral resources may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the U.S. federal securities laws and the rules and regulations thereunder.

PHOENIX, June 26, 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 August 1, 2024, to shareholders of record as of July 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/20240625902151/en/

Contacts

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

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

In the latest trading session, Freeport-McMoRan (FCX) closed at $50.38, marking a +1.65% move from the previous day. This move outpaced the S&P 500's daily loss of 0.31%. Elsewhere, the Dow gained 0.67%, while the tech-heavy Nasdaq lost 1.09%.

Shares of the mining company witnessed a loss of 3.82% over the previous month, beating the performance of the Basic Materials sector with its loss of 6.38% and underperforming the S&P 500's gain of 2.73%.

Analysts and investors alike will be keeping a close eye on the performance of Freeport-McMoRan in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.46, signifying a 31.43% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.17 billion, up 7.52% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.72 per share and revenue of $25.36 billion, indicating changes of +11.69% and +10.96%, respectively, compared to the previous year.

It is also important to note the recent changes to analyst estimates for Freeport-McMoRan. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 3.55% increase. Freeport-McMoRan presently features a Zacks Rank of #3 (Hold).

Digging into valuation, Freeport-McMoRan currently has a Forward P/E ratio of 28.83. This expresses a premium compared to the average Forward P/E of 15.68 of its industry.

It's also important to note that FCX currently trades at a PEG ratio of 2.15. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Mining – Non Ferrous stocks are, on average, holding a PEG ratio of 0.78 based on yesterday's closing prices.

The Mining – Non Ferrous industry is part of the Basic Materials sector. At present, this industry carries a Zacks Industry Rank of 51, placing it within the top 21% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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We recently compiled a list of the 8 Best Rare Earth Stocks and ETFs. In this article, we are going to take a look at where Freeport-McMoRan Inc. (NYSE:FCX) stands against the other rare earth stocks and ETFs.

Rare earth elements (REEs), which refers to 17 metals that are similar chemically, are surprisingly abundant in Earth's crust. However, their dispersion and geochemical properties make them difficult and expensive to extract, leading to them being called "rare."

REEs are important for a vast range of technologies, earning them the nickname "vitamins of modern industry." Apart from being irreplaceable for clean energy and consumer electronics production, REEs are also strategic for defense and aerospace engineering, the production of aircraft, missiles, satellites, and communication systems.

Hence, it is no wonder that the global rare earth metals market is valued at an estimated $5.65 billion in 2024. Analysts project this market to experience steady growth, reaching $8.63 billion by 2031. This is equivalent to a compound annual growth rate (CAGR) of 6.2% over this period, indicating a promising future for the industry.

China has been dominating the rare earth metals market for decades producing a staggering 240,000 metric tons last year, over five times more than its closest competitor, the United States, according to US Geological Survey data. China further maintains its control by processing around 90% of the world's rare earths into permanent magnets used in various technologies. In 2022, China accounted for 70% of global production of REEs. This dominance stems from a combination of factors, including historical geological exploration efforts, favorable mining conditions, and government support for the industry.

Brazil, along with other Western countries, is currently working towards breaking China’s dominance of this industry. Brazil has advantages like low labor costs, clean energy, and established regulations. However, challenges include low rare earth prices which have gone down 70%, technical difficulties, and getting funding. Despite these challenges, Brazil is making progress with its first mine in operation and increased government support for the industry. To jumpstart its rare earth industry, the Brazilian government allocated 1 billion reais ($194.53 million) in February to fund strategic mineral projects.

Other countries are also working towards diversifying the supply chain. In recent years, the United States has sought to mitigate risks related to the REEs’ supply chain. This includes restarting domestic mining operations, like the Mountain Pass site in California, and building processing facilities to avoid reliance on China. This objective of supply chain diversification has also led the US to secure deals with Vietnam on minerals and semiconductors.

Similar to the United States, the European Union (EU) is also actively promoting domestic extraction projects in countries such as Sweden, Finland, Spain, and Serbia. This is part of the EU's efforts to enhance its self-sufficiency in critical minerals, including rare earth elements.

Our Methodology

To shortlist the best rare earth stocks, we relied on Insider Monkey's database of 919 hedge funds as of Q1 2024 to analyze the hedge fund sentiment for each stock. We picked the rare earth stocks with the highest number of hedge fund investors. Furthermore, we included two of the best rare earth ETFs, chosen for their impressive 3-year returns. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

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

Freeport-McMoRan Inc. (NYSE:FCX)

Number of Hedge Fund Holders: 86

Freeport-McMoRan Inc. (NYSE:FCX) is a major mining company that digs for valuable minerals across three continents: North America, South America, and Indonesia. Established in 1987 and headquartered in Phoenix, Arizona, the company primarily focuses on copper, gold, and molybdenum, while also exploring other metals. Freeport-McMoRan Inc. (NYSE:FCX) ranks first on our list of the best rare earth stocks and ETFs.

Freeport-McMoRan Inc. (NYSE:FCX) is currently developing a geothermal heating system for its copper mines in Arizona. This sustainable heat source will improve copper recovery from previously mined materials. The project also includes improvements to the electrical grid for better reliability. The project has a total cost of $175 million and is expected to take 5-7 years to complete.

Freeport-McMoRan Inc. (NYSE:FCX) reported a strong Q1 2024 with adjusted EBITDA of $2.5 billion and operating cash flow of $1.9 billion. This positive performance was driven by a favorable copper price, averaging $3.94 per pound. The company highlighted efficient operations in the U.S. despite lower ore grades, while South American and Indonesian mines exceeded expectations. Capital expenditures were $800 million, excluding a $500 million investment in their Indonesian smelter project, which is on track for a June 2024 start.

Wall Street analysts are bullish on Freeport-McMoRan (NYSE:FCX), with an average price target of $53.86. This represents a potential increase of over 12% from the current price levels. Analysts' predictions range from a high of $60 to a low of $46 per share. The majority of the analysts (8 out of 14) have given the stock a “Buy” rating.

Overall FCX ranks 1st on our list of the best rare earth stocks and ETFs to buy. You can visit 8 Best Rare Earth Stocks and ETFs to see the other rare earth stocks and ETFs that are on hedge funds’ radar. While we acknowledge the potential of FCX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FCX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Disclosure: None. This article is originally published at Insider Monkey.

In the latest trading session, Southern Copper (SCCO) closed at $109.12, marking a -1.28% move from the previous day. This change lagged the S&P 500's 0.16% loss on the day. Meanwhile, the Dow experienced a rise of 0.04%, and the technology-dominated Nasdaq saw a decrease of 0.18%.

The the stock of miner has fallen by 5.16% in the past month, leading the Basic Materials sector's loss of 6.35% and undershooting the S&P 500's gain of 3.15%.

Analysts and investors alike will be keeping a close eye on the performance of Southern Copper in its upcoming earnings disclosure. In that report, analysts expect Southern Copper to post earnings of $1.06 per share. This would mark year-over-year growth of 51.43%. Meanwhile, the latest consensus estimate predicts the revenue to be $2.8 billion, indicating a 21.56% increase compared to the same quarter of the previous year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.22 per share and revenue of $11.29 billion. These totals would mark changes of +35.69% and +14.08%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Southern Copper. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 6.25% higher. Southern Copper is currently a Zacks Rank #2 (Buy).

With respect to valuation, Southern Copper is currently being traded at a Forward P/E ratio of 26.18. This denotes a premium relative to the industry's average Forward P/E of 15.51.

Also, we should mention that SCCO has a PEG ratio of 1.21. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Mining – Non Ferrous industry was having an average PEG ratio of 0.79.

The Mining – Non Ferrous industry is part of the Basic Materials sector. This industry, currently bearing a Zacks Industry Rank of 52, finds itself in the top 21% echelons 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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One stock that might be an intriguing choice for investors right now is Southern Copper Corporation SCCO. This is because this security in the Mining – Non Ferrous space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective. This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arguably taking place in the Mining – Non Ferrous space as it currently has a Zacks Industry Rank of 51 out of more than 250 industries, suggesting it is well-positioned from this perspective, especially when compared to other segments out there. Meanwhile, Southern Copper is actually looking pretty good on its own too. The firm has seen solid earnings estimate revision activity over the past month, suggesting analysts are becoming a bit more bullish on the firm’s prospects in both the short and long term.

Southern Copper Corporation Price and ConsensusSouthern Copper Corporation Price and Consensus

Southern Copper Corporation price-consensus-chart | Southern Copper Corporation Quote

In fact, over the past month, current quarter estimates have risen from 93 cents per share to $1.06 per share, while current year estimates have risen from $3.97 per share to $4.22 per share. This has helped SCCO to earn a Zacks Rank #2 (Buy), further underscoring the company’s solid position. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.So, if you are looking for a decent pick in a strong industry, consider Southern Copper. Not only is its industry currently in the top third, but it is seeing solid estimate revisions as of late, suggesting it could be a very interesting choice for investors seeking a name in this great industry segment.

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Morgan Stanley analyst Carlos De Alba upgraded both aluminum producer Alcoa and copper miner Freeport-McMoRan stock to Buy from Hold. EVs and HVACs will drive up the metals’ prices.

Southern Copper (SCCO) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Over the past month, shares of this miner have returned -7.4%, compared to the Zacks S&P 500 composite's +3.6% change. During this period, the Zacks Mining – Non Ferrous industry, which Southern Copper falls in, has lost 12.9%. The key question now is: What could be the stock's future direction?

Revisions to Earnings Estimates

For the current quarter, Southern Copper is expected to post earnings of $1.06 per share, indicating a change of +51.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +13.9% over the last 30 days.

For the current fiscal year, the consensus earnings estimate of $4.22 points to a change of +35.7% from the prior year. Over the last 30 days, this estimate has changed +6.3%.

For the next fiscal year, the consensus earnings estimate of $4.87 indicates a change of +15.3% from what Southern Copper is expected to report a year ago. Over the past month, the estimate has changed +3.2%.

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

12 Month EPS

12-month consensus EPS estimate for SCCO _12MonthEPSChartUrl

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.

For Southern Copper, the consensus sales estimate for the current quarter of $2.8 billion indicates a year-over-year change of +21.6%. For the current and next fiscal years, $11.29 billion and $12.1 billion estimates indicate +14.1% and +7.1% changes, respectively.

Last Reported Results and Surprise History

Southern Copper reported revenues of $2.6 billion in the last reported quarter, representing a year-over-year change of -7%. EPS of $0.94 for the same period compares with $1.04 a year ago.

Compared to the Zacks Consensus Estimate of $2.5 billion, the reported revenues represent a surprise of +3.89%. The EPS surprise was +21.79%.

Over the last four quarters, Southern Copper surpassed consensus EPS estimates two times. The company topped consensus revenue estimates two times over this period.

Valuation

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.

Southern Copper is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Conclusion

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 Southern Copper. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.

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Investors looking for stocks in the Mining – Non Ferrous sector might want to consider either Amerigo Resources (ARREF) or Southern Copper (SCCO). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, both Amerigo Resources and Southern Copper are holding a Zacks Rank of # 1 (Strong Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

ARREF currently has a forward P/E ratio of 7.31, while SCCO has a forward P/E of 25.58. We also note that ARREF has a PEG ratio of 0.37. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SCCO currently has a PEG ratio of 1.18.

Another notable valuation metric for ARREF is its P/B ratio of 1.83. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SCCO has a P/B of 11.09.

These metrics, and several others, help ARREF earn a Value grade of A, while SCCO has been given a Value grade of F.

Both ARREF and SCCO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ARREF is the superior value option right now.

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Freeport-McMoRan (FCX) closed at $47.26 in the latest trading session, marking a -1.77% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.77%. Meanwhile, the Dow gained 0.49%, and the Nasdaq, a tech-heavy index, added 0.95%.

The the stock of mining company has fallen by 11.29% in the past month, lagging the Basic Materials sector's loss of 5.19% and the S&P 500's gain of 3.71%.

Investors will be eagerly watching for the performance of Freeport-McMoRan in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.45, marking a 28.57% rise compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $6.01 billion, indicating a 4.76% upward movement from the same quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.71 per share and revenue of $25.23 billion, indicating changes of +11.04% and +10.39%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Freeport-McMoRan. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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 past month, there's been a 3.1% rise in the Zacks Consensus EPS estimate. Freeport-McMoRan is currently a Zacks Rank #3 (Hold).

Looking at valuation, Freeport-McMoRan is presently trading at a Forward P/E ratio of 28.1. For comparison, its industry has an average Forward P/E of 15.89, which means Freeport-McMoRan is trading at a premium to the group.

One should further note that FCX currently holds a PEG ratio of 2.1. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Mining – Non Ferrous industry had an average PEG ratio of 0.76.

The Mining – Non Ferrous industry is part of the Basic Materials sector. At present, this industry carries a Zacks Industry Rank of 37, placing it within the top 15% of over 250 industries.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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Take oil and copper stocks, for example. The fund hit a multiyear high of $98, pushed by WTI crude oil’s 12% rise. Through late May, miners Freeport-McMoRan and Southern Copper rose 50% and 29%, respectively.

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