QS Research · Michael Burry's Scion Capital analyst template · 2006
FREEPORT-MCMORAN INC (FCX)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -26% · downside -38% · upside +18%
FCX is a cyclical copper price-taker, and on the FY2020-FY2025 normalized EBITDA of $8.26B versus TTM EBITDA of $9.35B, and normalized net income to common of $2.39B versus TTM net income of $5.03B, the stock at $59.42 is not cheap. At the 8.5x peer median EV/EBITDA, normalized value is about $44.2 (-25.6%), even the 13.0x SCCO-like upside is only about $70.1 (+18.0%), and the 7.2x downside is about $36.7 (-38.2%). The Grasberg mud rush and cost inflation look temporary, and the balance sheet is sound with net debt of $6.74B, but a 16.9x TTM P/E and 2.3% FCF yield leave no margin of safety. Watch for the 2027 Grasberg ramp rather than paying today's multiple.
Key numbers
- Share price: $59.42
- Market cap: $85.26B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $26.44B
- EV / EBITDA (TTM): 9.8x
- P/E (TTM): 16.9x
- Price / book: 4.06x
The 15 boxes
- ✓ 1. Long-form business notes
FCX is a copper-first miner: FY2025 consolidated revenue was 75% copper, 15% gold and 8% molybdenum, produced across U.S. copper/molybdenum mines, Cerro Verde in Peru, El Abra in Chile and the Grasberg district in Indonesia, with the Grasberg district the source of 98% of FY2025 gold and the U.S. mines 77% of molybdenum. Over the FY2020-to-FY2025 XBRL record revenue ran $13.89B to $25.19B and operating income swung between $2.44B (FY2020) and $8.37B (FY2021) before $6.52B in FY2025, tracking the copper price rather than volume. Between the FY2020 and FY2025 10-Ks the business changed in three ways: capital spending roughly doubled, PTFI became a fully integrated refined-copper and gold producer after its Gresik smelter and refinery completion in 2025, and reported reserves shifted toward U.S. and South American copper (South America 29% to 40% of copper reserves; Indonesia 29% to 22%). FY2025 was hit by the September 2025 Grasberg mud rush, with the Grasberg Block Cave phased restart anticipated to begin in second-quarter 2026.
- ✓ 2. Competitive advantage
The sources support a scale-and-ore-body advantage, not a pricing-power one: FCX ranked third among copper producers in 2025 with about 5% of estimated world mined copper (Wood Mackenzie, December 2025 estimates) and supplies roughly 70% of total U.S. refined copper production. The margin history shows a price-taker with operating leverage: operating margin ran 17.6% in FY2020, 37.3% in FY2021, then 30.3%, 27.4%, 27.3% and 25.9% in FY2022-FY2025 (computed from the XBRL revenue and operating income lines). Cash generation is reinvested heavily (capex $21.67B against D&A of $12.10B over FY2020-FY2025), and a large gap sits between operating income and net income to common ($6.52B vs $2.20B in FY2025). Management's stated basis for the advantage - ore-body size, quality and grade plus cost control - is asserted, not quantified in these sources.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue and operating income rose on higher realized copper, gold and molybdenum prices even as copper and gold sales volumes fell; net income to common was $1,174M but included $101M of net charges. First nine months of 2026 operating cash flow was $5,524M and capex $3,236M; at September 30, 2026 cash was $4,335M against $9,398M total debt, and FCX returned $955M to shareholders in the first nine months. Year 2026 guidance calls for 3.0 billion pounds of copper sales, $1.90/lb unit net cash costs, about $8.5B operating cash flow and $4.4B capex; the October 2, 2026 operational update said Q3 2026 sales and costs were near plan and Grasberg targets 80% of capacity in mid-2027.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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