June 11, 2017
NYSE: FCX
FREEPORT-MCMORAN INC
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
NA
B-
C+
C
Annual Dividend Yield
NA
SELL
C-
D
Beta
2.56
Sector: Materials
FCX BUSINESS DESCRIPTION
Freeport-McMoRan Inc. engages in the mining of
mineral properties in the United States, Indonesia,
Peru, and Chile. It primarily explores for copper
concentrate, copper cathode, copper rod, gold,
molybdenum, silver, and other metals, as well as oil
and gas.
D+
D-
E+
E
E-
Market Capitalization
$17.4 Billion
Sub-Industry: Copper
Weekly Price: (US$)
F
HOLD
52-Week Range
$9.24-$17.06
RATING SINCE
01/26/2017
Price as of 6/8/2017
$12.06
Source: S&P
SMA (50)
SMA (100)
1 Year
2 Years
22
20
18
16
14
12
STOCK PERFORMANCE (%)
3 Mo.
Price Change
-3.06
10
1 Yr.
4.14
3 Yr (Ann)
-29.85
12 Mo.
6.04
101.84
102.46
3 Yr CAGR
-11.21
-53.23
-50.35
8
6
GROWTH (%)
4
Last Qtr
3.05
105.44
103.89
Revenues
Net Income
EPS
2
Rating History
SELL
HOLD
Volume in Millions
500
RETURN ON EQUITY (%)
FCX
7.35
-377.27
-27.27
Q1 2017
Q1 2016
Q1 2015
Ind Avg
5.28
-7.74
1.26
S&P 500
12.81
11.95
14.20
40.20
33.08
25.74
FCX
Ind Avg
S&P 500
2016
Q1 0.13
Q4 0.22
Q3 0.18
Q1 -3.34
Q2 -0.23
Q4 -3.46
Q3 -3.59
Q2 -1.78
EPS ANALYSIS¹ ($)
Q1 -2.40
2016
0
2017
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
RECOMMENDATION
We rate FREEPORT-MCMORAN INC (FCX) a HOLD. The primary factors that have impacted our rating are
mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of
either a positive or negative performance for this stock relative to most other stocks. The company's
strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, revenue
growth and good cash flow from operations. However, as a counter to these strengths, we also find
weaknesses including relatively poor performance when compared with the S&P 500 during the past year
and generally higher debt management risk.
P/E COMPARISON
2015
250
HIGHLIGHTS
FREEPORT-MCMORAN INC reported significant earnings per share improvement in the most recent quarter
compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per
share growth over the past year. We feel that this trend should continue. This trend suggests that the
performance of the business is improving. During the past fiscal year, FREEPORT-MCMORAN INC continued
to lose money by earning -$3.17 versus -$11.23 in the prior year. This year, the market expects an improvement
in earnings ($1.06 versus -$3.17).
FCX's revenue growth trails the industry average of 24.4%. Since the same quarter one year prior, revenues
slightly increased by 3.0%. Growth in the company's revenue appears to have helped boost the earnings per
share.
2017
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
The company's current return on equity greatly increased when compared to its ROE from the same quarter
one year prior. This is a signal of significant strength within the corporation. Compared to other companies in
the Metals & Mining industry and the overall market on the basis of return on equity, FREEPORT-MCMORAN
INC has outperformed in comparison with the industry average, but has underperformed when compared to
that of the S&P 500.
The debt-to-equity ratio is very high at 2.43 and currently higher than the industry average, implying increased
risk associated with the management of debt levels within the company. Even though the debt-to-equity ratio
is weak, FCX's quick ratio is somewhat strong at 1.12, demonstrating the ability to handle short-term liquidity
needs.
In its most recent trading session, FCX has closed at a price level that was not very different from its closing
price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. We
feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to
its industry tend to reduce its upside potential.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 1
June 11, 2017
NYSE: FCX
FREEPORT-MCMORAN INC
Sector: Materials Copper Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
PEER GROUP ANALYSIS
Market Capitalization
$17.4 Billion
52-Week Range
$9.24-$17.06
Price as of 6/8/2017
$12.06
INDUSTRY ANALYSIS
REVENUE GROWTH AND EBITDA MARGIN*
120%
Beta
2.56
The metals and mining industry is comprised of companies that engage in exploration, mine development, and
ore mining. The industry includes precious metals mining for metals such as gold, silver, and platinum
aluminum as well as companies mining or processing industrial metals such as steel, copper, & aluminum.
The US is the largest producer of primary aluminum and the second largest producer of gold, exporting
materials worth over $26 billion annually.
ASM
FA
RA
VO
BL
E
SCCO
AEM
FCX TGB
ABX
DDC
UN
ATI
FA
AKS
LE
-40%
B
RA
VO
Revenue Growth (TTM)
AP
NSU
0%
50%
EBITDA Margin (TTM)
Companies with higher EBITDA margins and
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth
rates. Companies for this scatter plot have a market
capitalization between $82.3 Million and $27.8
Billion. Companies with NA or NM values do not
appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
120%
REVENUE GROWTH AND EARNINGS YIELD
ASM
FA
RA
VO
BL
E
UN
B
RA
VO
ATI
LE
-40%
FA
Revenue Growth (TTM)
AP
-50%
SCCO
TGB AEM
FCX
ABX
AKS
DDC
NSU
10%
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -36.8% and
109.1%. Companies with NA or NM values do not
appear.
According to recent estimates, there are more than 7000 metals and mining firms in the US. The industry is
mature, cyclical, capital intensive and dominated by large companies. Fierce consolidation activity has been
a key trend since 2005. Some of the major names in the industry are Alcoa Inc. (AA), Century Aluminum Co.
(CENX), Kaiser Aluminum Corporation (KALU), Nucor Corporation (NUE), Cliffs Natural Resources Inc. (CLF),
and Newmont Mining Corp. (NEM).
The US steel industry is currently worth more than $50 billion with annual growth rates around 1% to 2%.
Process chains are long with high production volumes. Recently, large quantities of low-cost imports have
impeded growth. However, the industry has seen enhanced productivity, energy efficiency, and higher yield
due to restructuring, downsizing, and widespread implementation of new technologies. In the coming years,
overcapacity and price instability will remain critical issues. Efficient production, better-suited products,
enhanced capacity utilization and environmentally friendly practices are vital factors to future success.
The US is the largest producer of primary aluminum, exporting $39 billion annually. The aluminum sector is
cyclical, mature, capital intensive, and geographically concentrated. Demand comes from transportation,
packaging, consumer electronics, construction, aerospace and power companies. The industry is overtly
responsive to economic conditions. Companies are responding to pricing pressures through consolidation
and vertical integration, which is aimed at streamlining the supply chain.
In the US, Nevada accounts for four-fifths of all domestic gold output. Domestic demand for gold has declined
as retail jewelry sales have fallen sharply in recent years. However, higher consumption in emerging
countries and increased investor demand for gold investment products like ETFs have helped bolster market
prices. High gold prices have attracted new players and have prompted existing ones to expand.
Future growth for the US metals and mining industry depends upon demand from BRIC nations, developing
countries, and domestic consumers. The industry faces a number of challenges including environmental
concerns, deteriorating ore grades, overproduction, technological changes, and the global economy. Intense
competition from nations such as Canada, Russia, China and Mexico pose threats to the US mining industry
because those nations have lower labor costs, lax environmental regulations and lower operating costs.
Sustainability of high prices, resurgent global demand, particularly from the Asia-Pacific region, and signs of
increasing industrial output across Europe and the United States may boost industry performance.
PEER GROUP: Metals & Mining
Ticker
FCX
ASM
NSU
TGB
SCCO
AP
AKS
ABX
ATI
AEM
DDC
Recent
Company Name
Price ($)
FREEPORT-MCMORAN INC
12.06
AVINO SILVER&GOLD MINES LTD
1.57
NEVSUN RESOURCES LTD
2.48
TASEKO MINES LTD
1.28
SOUTHERN COPPER CORP
36.01
AMPCO-PITTSBURGH CORP
16.45
AK STEEL HOLDING CORP
6.30
BARRICK GOLD CORP
16.64
ALLEGHENY TECHNOLOGIES INC 16.94
AGNICO EAGLE MINES LTD
49.67
DOMINION DIAMOND CORP
12.95
Market
Cap ($M)
17,449
82
749
289
27,836
202
1,983
19,402
1,843
11,473
1,045
Price/
Earnings
40.20
31.40
NA
NM
30.52
NM
24.23
13.75
NM
54.58
1,295.00
Net Sales
TTM ($M)
14,929.00
39.90
209.92
311.17
5,718.60
371.80
5,897.10
8,621.00
3,243.00
2,195.16
570.86
Net Income
TTM ($M)
258.00
1.99
3.66
-13.40
905.80
-81.71
68.30
1,417.00
-522.20
206.99
0.19
The peer group comparison is based on Major Copper companies of comparable size.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 2
June 11, 2017
NYSE: FCX
FREEPORT-MCMORAN INC
Sector: Materials Copper Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
COMPANY DESCRIPTION
Freeport-McMoRan Inc. engages in the mining of mineral
properties in the United States, Indonesia, Peru, and
Chile. It primarily explores for copper concentrate, copper
cathode, copper rod, gold, molybdenum, silver, and other
metals, as well as oil and gas. The company's portfolio of
assets include the Grasberg minerals district in
Indonesia; Morenci, Bagdad, Safford, Sierrita, and Miami
in Arizona; Tyrone and Chino in New Mexico; and
Henderson and Climax in Colorado, North America, as
well as Cerro Verde and El Abra mines in South America.
It also operates a portfolio of oil and gas assets
comprising oil and natural gas production onshore in
South Louisiana; and on the GOM Shelf and oil
production offshore California, as well as natural gas
production from the Madden area in central Wyoming.
As of December 31, 2016, the company's estimated
consolidated recoverable proven and probable mineral
reserves totaled 86.8 billion pounds of copper, 26.1
million ounces of gold, and 2.95 billion pounds of
molybdenum, as well as estimated proved developed oil
and natural gas reserves totaled 18 million barrels of oil
equivalents. The company was formerly known as
Freeport-McMoRan Copper & Gold Inc. and changed its
name to Freeport-McMoRan Inc. in July 2014.
Freeport-McMoRan Inc. was founded in 1987 and is
headquartered in Phoenix, Arizona.
FREEPORT-MCMORAN INC
333 North Central Avenue
Phoenix, AZ 85004
USA
Phone: 602-366-8100
http://www.fcx.com
Beta
2.56
Market Capitalization
$17.4 Billion
52-Week Range
$9.24-$17.06
Price as of 6/8/2017
$12.06
STOCK-AT-A-GLANCE
Below is a summary of the major fundamental and technical factors we consider when determining our
overall recommendation of FCX shares. It is provided in order to give you a deeper understanding of our rating
methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
valuation. Please refer to our Valuation section on page 5 for further information.
FACTOR
SCORE
2.0
Growth
out of 5 stars
weak
Measures the growth of both the company's income statement and
cash flow. On this factor, FCX has a growth score better than 30% of the
stocks we rate.
strong
1.5
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 20% of the companies we
cover.
strong
2.0
Efficiency
out of 5 stars
weak
Measures the strength and historic growth of a company's return on
invested capital. The company has generated more income per dollar of
capital than 30% of the companies we review.
strong
1.0
Price volatility
out of 5 stars
weak
Measures the volatility of the company's stock price historically. The
stock is less volatile than 10% of the stocks we monitor.
strong
1.5
Solvency
out of 5 stars
weak
Measures the solvency of the company based on several ratios. The
company is more solvent than 20% of the companies we analyze.
strong
0.5
Income
out of 5 stars
weak
Measures dividend yield and payouts to shareholders. This company
pays no dividends.
strong
THESTREET RATINGS RESEARCH METHODOLOGY
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 3
June 11, 2017
NYSE: FCX
FREEPORT-MCMORAN INC
Sector: Materials Copper Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
0.23
1.06 E
1.37 E
Q2 FY17
2017(E)
2018(E)
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Q1 FY17
3,341.00
1,039.00
579.00
228.00
Q1 FY16
3,242.00
-2,986.00
-3,705.00
-4,184.00
Q1 FY17
4,001.00
36,576.00
15,363.00
6,318.00
Q1 FY16
331.00
42,664.00
20,777.00
3,692.00
Q1 FY17
35.50%
31.09%
17.33%
0.41
0.70%
7.35%
Q1 FY16
-87.35%
-92.10%
-114.28%
0.33
-32.68%
-377.27%
Q1 FY17
2.02
0.71
195.00
2.97
Q1 FY16
1.63
0.85
218.00
-17.00
Q1 FY17
1,447
0.00
0.13
4.37
NA
20,679,623
Q1 FY16
1,252
0.00
-3.34
2.95
NA
29,103,434
Beta
2.56
Market Capitalization
$17.4 Billion
52-Week Range
$9.24-$17.06
Price as of 6/8/2017
$12.06
FINANCIAL ANALYSIS
FREEPORT-MCMORAN INC's gross profit margin for the first quarter of its fiscal year 2017 has significantly
increased when compared to the same period a year ago. The company has grown its sales and net income
during the past quarter when compared with the same quarter a year ago, and although its growth in net
income has outpaced the industry average, its revenue growth has not. FREEPORT-MCMORAN INC has
average liquidity. Currently, the Quick Ratio is 1.12 which shows that technically this company has the ability
to cover short-term cash needs. The company's liquidity has increased from the same period last year,
indicating improving cash flow.
At the same time, stockholders' equity ("net worth") has greatly increased by 71.12% from the same quarter
last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will
face financial difficulties in the near future.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
BALANCE SHEET
Cash & Equiv. ($mil)
Total Assets ($mil)
Total Debt ($mil)
Equity ($mil)
PROFITABILITY
Gross Profit Margin
EBITDA Margin
Operating Margin
Sales Turnover
Return on Assets
Return on Equity
DEBT
Current Ratio
Debt/Capital
Interest Expense
Interest Coverage
SHARE DATA
Shares outstanding (mil)
Div / share
EPS
Book value / share
Institutional Own %
Avg Daily Volume
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 4
June 11, 2017
NYSE: FCX
FREEPORT-MCMORAN INC
Sector: Materials Copper Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
Beta
2.56
RATINGS HISTORY
Our rating for FREEPORT-MCMORAN INC has not
changed since 1/26/2017. As of 6/8/2017, the stock
was trading at a price of $12.06 which is 29.3%
below its 52-week high of $17.06 and 30.5% above
its 52-week low of $9.24.
HOLD: $15.84
SELL: $19.40
2 Year Chart
52-Week Range
$9.24-$17.06
$20
Price/Earnings
$10
1
2
3
premium
$15
4
5
FCX 40.20
Peers 33.08
• Premium. A higher P/E ratio than its peers can
signify a more expensive stock or higher growth
expectations.
• FCX is trading at a premium to its peers.
Price/Projected Earnings
1
2
3
premium
4
5
Price reflects the closing price as of the date listed, if available
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
Price/Book
To
Hold
Sell
(as of 6/8/2017)
43.85% Buy - We believe that this stock has the
opportunity to appreciate and produce a total return of
more than 10% over the next 12 months.
30.12% Hold - We do not believe this stock offers
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total
return is roughly in balance with the risk of loss.
26.02% Sell - We believe that this stock is likely to
decline by more than 10% over the next 12 months, with
the risk involved too great to compensate for any
possible returns.
TheStreet Ratings
14 Wall Street, 15th Floor
New York, NY 10005
www.thestreet.com
Research Contact: 212-321-5381
Sales Contact: 866-321-8726
1
2
3
premium
4
5
Price/Sales
1
2
premium
3
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
FCX NM
Peers 1.05
• Neutral. The PEG ratio is the stock’s P/E divided by
the consensus estimate of long-term earnings
growth. Faster growth can justify higher price
multiples.
• FCX's negative PEG ratio makes this valuation
measure meaningless.
Earnings Growth
1
2
3
4
lower
5
higher
FCX 102.46
Peers 236.18
• Lower. Elevated earnings growth rates can lead to
capital appreciation and justify higher
price-to-earnings ratios.
• However, FCX is expected to significantly trail its
peers on the basis of its earnings growth rate.
Sales Growth
discount
FCX 1.17
Peers 2.79
• Discount. In the absence of P/E and P/B multiples,
the price-to-sales ratio can display the value
investors are placing on each dollar of sales.
• FCX is trading at a significant discount to its
industry on this measurement.
3
FCX 4.81
Peers 11.34
• Discount. The P/CF ratio, a stock’s price divided by
the company's cash flow from operations, is useful
for comparing companies with different capital
requirements or financing structures.
• FCX is trading at a significant discount to its peers.
discount
FCX 2.76
Peers 1.71
• Premium. A higher price-to-book ratio makes a
stock less attractive to investors seeking stocks
with lower market values per dollar of equity on the
balance sheet.
• FCX is trading at a significant premium to its peers.
2
premium
discount
FCX 8.80
Peers 20.17
• Discount. A lower price-to-projected earnings ratio
than its peers can signify a less expensive stock or
lower future growth expectations.
• FCX is trading at a significant discount to its peers.
From
Sell
Sell
1
Price/CashFlow
discount
2016
MOST RECENT RATINGS CHANGES
Date
Price
Action
1/26/17
$15.84
Upgrade
6/8/15
$19.40 No Change
Price as of 6/8/2017
$12.06
VALUATION
HOLD. This stock's P/E ratio indicates a premium compared to an average of 33.08 for the Metals & Mining
industry and a significant premium compared to the S&P 500 average of 25.74. Conducting a second
comparison, its price-to-book ratio of 2.76 indicates a discount versus the S&P 500 average of 3.09 and a
premium versus the industry average of 1.71. The price-to-sales ratio is well below both the S&P 500 average
and the industry average, indicating a discount. After reviewing these and other key valuation criteria,
FREEPORT-MCMORAN INC proves to trade at a premium to investment alternatives within the industry.
$5
2015
Market Capitalization
$17.4 Billion
1
2
3
lower
4
5
higher
FCX 6.04
Peers 7.00
• Lower. A sales growth rate that trails the industry
implies that a company is losing market share.
• FCX trails its peers on the basis of sales growth
DISCLAIMER:
The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but
TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided
via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as
other third-party data providers.
TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided
for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or
other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a
qualified securities professional, before you make any investment. None of the information contained in this report constitutes,
or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a
determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of
the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the
investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at
http://www.thestreet.com/static/about/terms-of-use.html.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
Report Date: June 11, 2017
PAGE 5