Freeport-McMoRan Stock Loses 25% in 3 Months: Should You Buy Now?

Core Viewpoint - Freeport-McMoRan Inc. (FCX) has experienced a significant decline in share price, losing 25.1% over the past three months, primarily due to falling copper prices and high production costs [1][16]. Group 1: Stock Performance - FCX has underperformed compared to the Zacks Mining - Non Ferrous industry, which declined by 24.2%, but outperformed the S&P 500's fall of 13.6% [2]. - In comparison to peers, Southern Copper Corporation (SCCO), BHP Group Limited (BHP), and Rio Tinto Group (RIO) have lost 20.1%, 17.1%, and 11.1% respectively over the same period [2]. Group 2: Technical Indicators - FCX has been trading below the 200-day simple moving average (SMA) since November 11, 2024, indicating a bearish trend [5]. - The stock is currently below its 50-day SMA, following a death crossover on December 3, 2024 [5]. Group 3: Growth Opportunities - FCX is focused on expanding its production capacity, with significant projects underway, including a concentrator expansion at Cerro Verde in Peru, which is expected to add 600 million pounds of copper annually [10]. - The company is evaluating a large-scale expansion at El Abra in Chile and conducting pre-feasibility studies in Arizona to define further expansion opportunities [10]. Group 4: Financial Health - FCX reported operating cash flows of approximately $1.4 billion in Q4 2024, with full-year 2024 cash flows climbing 35% year over year to $7.2 billion [12]. - The company ended 2024 with $3.9 billion in cash and cash equivalents, alongside $3 billion and $1.5 billion available under its credit facilities [12][13]. - FCX has a net debt of $1.06 billion, which is below its targeted range of $3-$4 billion, and has a policy of distributing 50% of available cash to shareholders [13]. Group 5: Production Costs and Market Conditions - FCX's consolidated unit net cash costs per pound of copper increased by 9% year over year in Q4 2024, with expectations for a further 5% increase in Q1 2025 [15]. - The company faces challenges from higher labor and mining costs, particularly in North America [15]. - Copper prices fell nearly 12% in Q4 2024, closing at around $4 per pound, with ongoing concerns about demand, particularly from China [16][17]. Group 6: Earnings Estimates and Valuation - Earnings estimates for FCX for 2025 have been revised lower over the past 30 days, reflecting market concerns [18]. - FCX is currently trading at a forward price/earnings ratio of 16.35X, slightly below the industry average of 16.64X [19].