Freeport-McMoRan Inc. (FCX): A Bull Case Theory

We came across a bullish thesis on Freeport-McMoRan Inc. on Value investing subreddit by cyclist63c. In this article, we will summarize the bulls’ thesis on FCX. Freeport-McMoRan Inc.'s share was trading at $39.22 as of September 30th. FCX’s trailing and forward P/E were 27.08 and 15.27 respectively according to Yahoo Finance.

Freeport-McMoRan’s stock recently fell more than 20% following an accident at its Grasberg mine in Indonesia, a reaction that appears excessive given the fundamentals. While the incident will reduce production in 2026–2027 and increase costs, it does not alter Freeport’s reserves, which are the primary driver of long-term valuation in mining companies. The impact will likely be reflected in a modest rise in the company’s break-even costs, but not to a level that justifies such a steep decline.

Importantly, copper market dynamics remain highly supportive. Reports from BHP and the IEA point to a significant global copper undersupply through 2050, driven by declining ore grades, a lack of new discoveries, and permitting delays on new projects. This structural deficit should underpin higher copper prices over time.

The paradox is that while Freeport loses near-term output, it will eventually benefit from higher prices and better ore grades when Grasberg ramps back up, potentially generating outsized profits in 2–3 years. Goldman Sachs analysts estimate the accident reduced global copper supply by 3%, shifting the market from surplus to deficit. Market reaction effectively transferred lost value from Freeport to competitors like BHP, Rio Tinto, and Glencore, but as Grasberg returns to full capacity, this market share should normalize back in Freeport’s favor.

With copper and gold reserves totaling 97 billion pounds and 23 million ounces respectively, Freeport’s long-term asset base remains intact. For investors, the sell-off presents an attractive entry point, offering potential 25% upside simply from operational recovery, with further gains likely from structural copper scarcity.

Previously we covered a bullish thesis on Hudbay Minerals Inc. (HBM) by Unemployed Value Degen in December 2024, which highlighted operational efficiency, strong copper and gold assets, and a disciplined balance sheet. The company's stock price has appreciated approximately 70% since our coverage. This is because HBM executed on cost control and growth initiatives. The thesis still stands as its resilient operations provide long-term upside. Cyclist63c shares a similar perspective but emphasizes Freeport-McMoRan’s opportunity from the Grasberg mine incident and structural copper supply deficit.

Freeport-McMoRan Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 96 hedge fund portfolios held FCX at the end of the second quarter which was 84 in the previous quarter. While we acknowledge the potential of FCX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.