FCX's Shares Up 20% in 6 Months: What Should Investors Do Now?

Freeport-McMoRan Inc.’s FCX shares have gained 20% in the first six months, driven by strong earnings supported by higher copper prices. Although sales volumes were lower, significantly higher realized copper prices boosted the company’s second-quarter earnings. Resilient demand, supply concerns and uncertainties over tariffs continue to support prices of the red metal.  

Freeport has outperformed the Zacks Mining - Non Ferrous industry’s rise of 9.2% and the S&P 500’s increase of 14% over the same period. Its peers, Southern Copper Corporation SCCO and BHP Group Limited BHP, have gained 7.6% and 23.5%, respectively.

Freeport’s 6-month Price Performance

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FCX stock broke above its 50-day simple moving average (SMA) on Aug. 4, 2026. FCX has been trading above the 200-day SMA since late November 2025, suggesting a long-term uptrend. Following a golden crossover on July 8, 2025, the 50-day SMA is higher than the 200-day SMA, indicating a bullish trend.

FCX Stock Trades Above 50-Day SMA

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Let’s take a look at FCX’s fundamentals to analyze the stock better.

Freeport’s Growth Pipeline Supports Production Gains

Freeport continues to leverage its portfolio of high-quality copper assets, emphasizing disciplined execution and organic growth initiatives to strengthen its production profile. FCX has completed the evaluation of a large-scale expansion at El Abra in Chile to define a large sulfide resource that could potentially support a major mill project similar to the large-scale concentrator at Cerro Verde, with an estimated resource of approximately 20 billion recoverable pounds of copper. The expansion is expected to result in the addition of more than 700 million pounds of copper production annually. 

In Arizona, FCX is progressing with pre-feasibility studies at its Safford/Lone Star operations, with completion targeted for 2026, to assess a sizable sulfide expansion opportunity. It has expansion opportunities at Bagdad in Arizona that can more than double the concentrator capacity of the operation. Technical and economic studies have revealed the potential to build concentrating facilities to boost copper production by 200-250 million pounds annually. 

PT Freeport Indonesia (PT-FI) is developing the Kucing Liar ore body within the Grasberg district with a targeted ramp-up expected to commence in 2030. Studies completed by FCX in 2025 show an opportunity to increase Kucing Liar’s design capacity to 130,000 metric tons of ore per day and reserves by roughly 20% at low costs.       

FCX’s Financial Strength Enables Capital Flexibility

FCX has a strong liquidity profile and generates substantial cash flows, providing ample flexibility to fund expansion projects, reduce debt and enhance shareholder returns. It generated solid operating cash flows of $5.6 billion in 2025. Cash flows provided by operations were around $2 billion in the second quarter of 2026. Freeport ended the second quarter with strong liquidity, including $4.1 billion in cash and cash equivalents, $3 billion in availability under the Freeport revolving credit facility, and $1.5 billion in availability under the PT-FI credit facility.

At the end of the second quarter, Freeport had a net debt of $2.1 billion, excluding PTFI’s new downstream processing facilities. Its net debt is below its targeted range of $3-$4 billion. Freeport has a policy of distributing 50% of the available cash to its shareholders and the balance to either reduce debt or invest in growth projects. FCX has no significant debt maturities until 2027. Its long-term debt-to-capitalization is around 20.2% compared with 38.6% for Southern Copper and 30.3% for BHP Group.

FCX offers a dividend yield of roughly 0.4% at the current stock price. Its payout ratio is 13% (a ratio below 60% is a good indicator that the dividend will be sustainable). Backed by strong financial health, the company's dividend is perceived to be safe and reliable.

Freeport Stands to Gain From Favorable Copper Prices

Copper prices continue to show strength driven by robust demand from China and the United States. Structural tailwinds, including electric vehicles (EVs), renewable energy projects, artificial intelligence data center growth and grid modernization, continue to boost copper consumption. Worries about tightening supply amid rising EV and infrastructure demand aided the red metal. Supply risks stem from operational issues in top producer Chile, along with export bans on copper concentrates from the Democratic Republic of Congo.

Copper surged to an all-time high near $6.9 per pound recently on tariff-related uncertainties and supply tightness. Imports to the United States have surged ahead of a potential tariff announcement by the Trump administration. Copper prices are currently hovering near $6.5 per pound and up more than 40% year over year.    
       
Freeport’s average realized copper price climbed around 36% year over year to $6.17 per pound in the second quarter. Higher prices are expected to continue to support its performance.

Higher Costs Threaten to Squeeze FCX’s Margins

Freeport faces headwinds from higher costs. Its second-quarter unit net cash costs jumped 74% year over year to $1.97 per pound due to lower copper volumes. Freeport expects unit net cash costs of $2 per pound for the third quarter, while projecting a full-year average of roughly $1.9 (compared with $1.65 in 2025). The projected third-quarter unit cost reflects a roughly 43% year-over-year increase. The uptick in costs reflects higher costs of energy and other consumables due to the Middle East conflict and persistent pressure on volumes. Higher costs are expected to weigh on the company's margins.   

Volume Weakness a Drag on FCX’s Prospects

Freeport’s copper sales volumes tumbled approximately 30% year over year in the second quarter to 710 million pounds. The downside primarily resulted from lower operating rates during the phased ramp-up of the Grasberg Block Cave mine in Indonesia following the mud rush incident in September 2025.  

While the company’s third-quarter outlook for copper sales volumes of 750 million pounds indicates a sequential improvement, it suggests a 23% year-over-year decline. The company, in April 2026, lowered its consolidated sales volume projections for full-year 2026 to around 3.1 billion pounds of copper from the prior view of 3.4 billion pounds due to an expected delay in achieving full ramp-up of the Grasberg Block Cave mine. Lower sales volumes are expected to weigh on its top line.

FCX’s Earnings Estimates Moving Higher

Freeport’s earnings estimates have been going up over the past 60 days. The Zacks Consensus Estimate for 2026 and 2027 earnings has been revised higher over the same time frame.

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A Look at FCX’s Valuation

FCX is currently trading at a forward price/earnings of 20.48X, a roughly 14.9% discount to the industry average of 24.06X. The FCX stock is trading at a discount to Southern Copper and at a premium to BHP Group.

FCX’s P/E F12M Vs. Industry, SCCO and BHP

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How Should Investors Play FCX Stock?

Freeport benefits from favorable copper prices, robust liquidity and a pipeline of expansion projects that can support long-term production growth. Its financial flexibility, disciplined capital allocation and rising earnings estimates strengthen the investment case. However, lower copper volumes and higher input costs could pressure near-term margins and earnings. Given strong copper fundamentals and near-term operational headwinds, retaining this Zacks Rank #3 (Hold) stock for now appears appropriate while awaiting volume recovery and cost normalization.

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This article originally published on Zacks Investment Research (zacks.com).

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