Freeport-McMoRan Inc (FCX, Financial) recently reported a daily gain of 2.91%, with a three-month gain of 11.8%. The company's Earnings Per Share (EPS) stands at 1.45. But the question remains - is the stock fairly valued? In this article, we delve into a comprehensive valuation analysis to answer this question. So, let's get started.
About Freeport-McMoRan Inc
Freeport-McMoRan Inc is a globally recognized mining company with proven and probable mineral reserves of copper, gold, and molybdenum. The company operates geographically diverse assets, including the Grasberg minerals district in Indonesia and mining operations in North America and South America. Its portfolio also includes the large-scale Morenci minerals district in Arizona and the Cerro Verde operation in Peru. The company primarily generates revenue from the sale of Copper.
Understanding the GF Value
The GF Value is a unique measure of a stock's intrinsic value, calculated based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. The GF Value Line on our summary page gives an overview of the fair value that the stock should be traded at.
The stock of Freeport-McMoRan (FCX, Financial) appears to be fairly valued, according to GuruFocus' valuation method. The GF Value estimates the stock's fair value based on historical multiples, an internal adjustment based on the company's past business growth, and analyst estimates of future business performance. If the stock's share price is significantly above the GF Value Line, the stock may be overvalued and have poor future returns. Conversely, if the stock's share price is significantly below the GF Value Line, the stock may be undervalued and have high future returns. At its current price of $40.15 per share, Freeport-McMoRan has a market cap of $57.60 billion and appears to be fairly valued.
Because Freeport-McMoRan is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth.
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