The recent mini-dip in the share price of copper and gold miner Freeport-McMoRan (FCX 3.51%) presents a good buying opportunity in a company that's set to dramatically improve its earnings through 2026 and continue doing so through 2027. With copper trading close to an all-time high, the miner's outlook is very positive, and its valuation remains attractive.
Copper prices continue to surge
I've used the plural to illustrate that there are two key copper prices that investors follow and to highlight a bullish point for Freeport. There are the Commodity Exchange (COMEX) price in the U.S. and the London Metal Exchange (LME) price used internationally. The good news is that both are trading close to their all-time highs.
NYSE: FCX
Key Data Points
It might seem obvious that COMEX and LME copper prices should trade in sync; after all, copper is a commodity product. However, the reality is that a significant spread existed between the two in 2025, as the market bid up COMEX prices in anticipation of tariffs on imported copper by the Trump administration. Indeed, the COMEX/LME copper price spread reached almost 30% in the summer.
Both copper prices are now close to all-time highs, with the COMEX price currently around $5.65 per pound, up from $4.10 a year ago. That's more supportive for Freeport, as it indicates strength in underlying demand rather than U.S. inventory stockpiling ahead of potential tariffs.
Freeport-McMoRan's recovery in 2026
That said, Freeport is not yet fully able to take advantage because the company suffered a tragic, fatal accident in an Indonesian mine, which has reduced its production expectations for 2025 and 2026. For an illustration of how this affected sales expectations, consider the following comparison of the sales guidance provided in July and November.
|
Freeport-McMoRan Guidance |
2025 Estimate |
2026 Estimate |
2027 Estimate |
|---|---|---|---|
|
Copper (July) billions of pounds |
3.95 |
4.3 |
4.3 |
|
Copper (November) billions of pounds |
3.5 |
3.45 |
4.1 |
|
Gold (July) millions of ounces |
1.3 |
1.6 |
1.5 |
|
Gold (November) millions of ounces |
1.05 |
0.75 |
1.2 |
Data source: Freeport-McMoRan presentations.
Three reasons to buy Freeport-McMoRan stock
The downgrade to sales volume expectations is disappointing, but there are three key reasons why Freeport stock is highly attractive.
First, at the end of July, after the tariffs were announced and excluded copper ores and concentrates, the COMEX price crashed to about $4.40 per pound, while gold traded at around $3,360 per ounce. They now trade at $5.65 per pound and $4,330 per ounce, respectively. The price increase will offset the lost sales volume.
Image source: Getty Images.
Second, management expects to gradually return the Indonesian operations to full production through 2026 and 2027. For example, 2026 will be a tale of two halves, with 40% of copper and 20% of gold full-year sales in the first half, leading to 60% and 80% in the second half, respectively.
Indeed, Wall Street analysts expect Freeport to generate earnings before interest, taxation, depreciation, and amortization (EBITDA) of about $1.5 billion in the fourth quarter of 2025, and then sequentially improve through 2026 to reach $3.7 billion in the fourth quarter of 2026 as Indonesia production improves.
Third, management estimates that, assuming a copper price of $5 per pound, it will generate EBITDA of $12 billion in 2026 and $15.5 billion on average in 2027 and 2028. Given that the current price is 13% above Freeport's assumption and its enterprise value, or EV (market capitalization plus net debt), is just $89.4 billion, the stock appears to be a great value.
FCX EV to EBITDA data by YCharts
For example, those conservative valuations imply EV/EBITDA multiples of 7.5 in 2026 and 5.8 in 2027. While it's incredibly difficult to predict where copper prices will be, an investor willing to be agnostic on the matter and simply assume the current price will hold will see substantive upside potential in the stock.
