Freeport-McMoRan Inc.’s FCX shares have popped 20.2% year to date, thanks to its strong fourth-quarter earnings performance and an uptick in copper prices, driven by concerns over tighter global supply and solid demand. Although sales volumes declined, the company saw a sharp increase in realized copper prices in the fourth quarter, driving its earnings.Freeport has underperformed the Zacks Mining – Non Ferrous industry’s rise of 21.6% but topped the S&P 500’s decline of 4.1% over the same period. Its peers, Southern Copper Corporation SCCO and BHP Group Limited BHP, have rallied 23.1% and 20.6%, respectively.

Freeport’s YTD Price Performance

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FCX stock slipped below the 50-day simple moving average (SMA) yesterday after eclipsing it the day before. FCX has been trading above the 200-day SMA since late November 2025, suggesting a long-term uptrend. Following a golden crossover on July 8, 2025, the 50-day SMA is higher than the 200-day SMA, indicating a bullish trend.

FCX Stock Trades Below 50-Day SMA

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Let’s take a look at FCX’s fundamentals to analyze the stock better.

FCX’s Growth Actions to Expand Capacity & Drive Production

Freeport continues to leverage its portfolio of high-quality copper assets, emphasizing disciplined execution and organic growth initiatives to strengthen its production profile. At its Cerro Verde operation in Peru, a large-scale concentrator expansion provided incremental annual production of around 600 million pounds of copper and 15 million pounds of molybdenum. It has completed the evaluation of a large-scale expansion at El Abra in Chile to define a large sulfide resource that could potentially support a major mill project similar to the large-scale concentrator at Cerro Verde, with an estimated resource of approximately 20 billion recoverable pounds of copper.  In Arizona, FCX is progressing with pre-feasibility studies at its Safford/Lone Star operations, with completion targeted for 2026, to assess a sizable sulfide expansion opportunity. It has expansion opportunities at Bagdad in Arizona that can more than double the concentrator capacity of the operation. Technical and economic studies have revealed the potential to build concentrating facilities to boost copper production by 200-250 million pounds annually. PT Freeport Indonesia (PT-FI) substantially completed the construction of the new greenfield smelter in Eastern Java during 2024, with the start-up of operations having commenced in the second quarter of 2025. The first production of copper anode was achieved in July 2025. PT-FI is also developing the Kucing Liar ore body within the Grasberg district with a targeted ramp-up to commence in 2030. FCX completed studies in 2025 that showed an opportunity to increase Kucing Liar’s design capacity to 130,000 metric tons of ore per day and reserves by roughly 20% at low costs. Gold production also started at the new precious metals refinery in late 2024.

FCX’s Solid Balance Sheet & Capital Discipline Aid Growth

FCX has a strong liquidity profile and generates substantial cash flows, providing ample flexibility to fund expansion projects, reduce debt and enhance shareholder returns. It generated solid operating cash flows of $5.6 billion in 2025, including $693 million in the fourth quarter. Freeport ended 2025 with strong liquidity, including $3.8 billion in cash and cash equivalents, $3 billion in availability under the FCX revolving credit facility, and $1.5 billion in availability under the PT-FI credit facility.At the end of 2025, Freeport had a net debt of $2.3 billion, excluding PTFI’s new downstream processing facilities. Its net debt is below its targeted range of $3-$4 billion. Freeport has a policy of distributing 50% of the available cash to its shareholders and the balance to either reduce debt or invest in growth projects. FCX has no significant debt maturities until 2027. Its long-term debt-to-capitalization is around 22.5% compared with 37.8% for Southern Copper and 29.3% for BHP Group.FCX offers a dividend yield of roughly 0.5% at the current stock price. Its payout ratio is 17% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong financial health, the company's dividend is perceived to be safe and reliable.

Favorable Copper Prices Augur Well for Freeport

Prices of copper, the backbone of electrification, were volatile yet mostly favorable last year due to global economic and trade uncertainties. Prices, for the most part, remained above $5 per pound in the fourth quarter of 2025. Copper prices started 2026 on a strong note, underpinned by robust demand from China and the United States. Structural tailwinds, including electric vehicles (EVs), renewable energy projects, data center growth and grid modernization, continue to boost copper consumption. Worries about tightening supply amid rising EV and infrastructure demand also supported the red metal.  Supply risks increased amid concerns over lower output and potential disruptions at major global mining operations. These factors led to prices surging to roughly $6.4 per pound in late January. Prices of the red metal were mostly volatile during February, largely trading near $6 per pound. Copper prices came under pressure last month amid concerns about the impact of surging oil prices on the global economy due to the war in the Middle East, dragging down prices to a three-month low of around $5.3 per pound in late March. Prices have rebounded since then on hopes of a de-escalation in the Iran war and are currently hovering near $5.6 per pound.   Freeport’s average realized copper price climbed around 28% year over year to $5.33 per pound in the fourth quarter. Favorable prices are expected to continue to support its performance.

Cost Inflation Weighs on FCX’s Margins

Freeport faces headwinds from higher costs. FCX saw a sharp increase in its average unit net cash cost per pound of copper in the fourth quarter of 2025 to $2.22 from $1.40 in the prior quarter, marking a roughly 59% spike. It also climbed 34% year over year. The increase was due to a decline in copper sales volumes.  Freeport's outlook for the first quarter of 2026 suggests higher costs on a sequential basis. It expects unit net cash costs to rise to $2.60 per pound, while projecting a full-year average of roughly $1.75. Lower expected sales volumes are likely to impact costs in the quarter adversely.  Higher costs are expected to weigh on the company's margins.      

Weaker Expected Volumes Mar FCX’s Prospects

Freeport’s copper sales volumes tumbled approximately 29% year over year in the fourth quarter to 709 million pounds, and fell from 977 million pounds in the prior quarter. The company sold 80,000 ounces of gold in the fourth quarter, down around 77% year over year. The downside primarily resulted from the temporary suspension of operations since the mud rush incident at the Grasberg Block Cave mine in Indonesia in September 2025. The company’s outlook for copper sales volumes for the first quarter of 2026 assumes minimal contribution from its Indonesian operations due to the Grasberg mine incident. FCX expects copper sales volumes of 640 million pounds, indicating a 10% sequential and 27% year-over-year decline. The company has issued weaker guidance for gold sales volume of 60,000 ounces, suggesting sequential and year-over-year decreases. Lower sales volumes are expected to weigh on its top line in the first quarter.

FCX’s Earnings Estimates Going Up

Freeport’s earnings estimates have been going up over the past 60 days. The Zacks Consensus Estimate for 2026 and 2027 earnings has been revised up over the same time frame.

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A Look at FCX’s Valuation

FCX is currently trading at a forward price/earnings of 22.61X, a 3.7% discount to the industry average of 23.47X. The FCX stock is trading at a discount to Southern Copper and at a premium to BHP Group.

FCX’s P/E F12M Vs. Industry, SCCO and BHP

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How Should Investors Play FCX Stock?

Freeport stands to benefit from progress in its expansion projects, which should boost production capacity. Its solid balance sheet offers the flexibility to invest in growth while continuing to support shareholder returns. Positive revisions to earnings estimates and favorable copper prices further support the outlook. However, softer sales volume expectations and rising unit costs call for caution. Investors who already hold this Zacks Rank #3 (Hold) stock may find it prudent to maintain their positions.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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