Core Viewpoint - Freeport-McMoRan Inc. is experiencing significant financial challenges due to a fatal mud rush at its Grasberg Block Cave mine in Indonesia, leading to production deferrals and a downgrade in stock performance expectations [1][2]. Group 1: Incident Impact - The mud rush incident on September 8 resulted in two fatalities and five missing workers, causing extensive damage to equipment and infrastructure at the Grasberg Block Cave, which is crucial for the company's copper and gold output [1][2]. - Analysts predict negligible production from the affected mine in Q4 2025, with 2026 output expected to be approximately 35% below previous guidance [3]. Group 2: Financial Forecasts - Scotiabank has downgraded Freeport-McMoRan's earnings forecasts, projecting adjusted EPS of $1.29 in 2025 (down from $1.68) and $1.16 in 2026 (down from $1.65), with a recovery to $1.49 in 2027 [4]. - Revenue projections are set at $24.98 billion in 2025, $26.02 billion in 2026, and $29.01 billion in 2027, indicating an overall increase despite the incident [4]. Group 3: Valuation Adjustments - The bank revised its valuation to reflect a blend of 9.0 times projected 2026-27 EV/EBITDA and 2.0 times the updated 8% NAVPS estimate, resulting in a lowered net asset value estimate of $19.15 per share [2][5]. - EBITDA estimates for 2025-26 have been cut by an average of 27% to $8.4 billion and $9.0 billion, respectively, with expectations of weaker free cash flow over the same period [5].