Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Freeport-McMoRan Inc. (NYSE: FCX) is an international mining company. The Company operates geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. Its portfolio of assets includes the Grasberg minerals district in Indonesia, which is a copper and gold deposits, and significant mining operations in North America and South America, including the Morenci minerals district in Arizona and the Cerro Verde operation in Peru.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 2.34% in the last three months, on the other hand a return of 5.29% in past six months.
• The stock is in its lower band of its 52-week range of USD 55.24 and 52-week low price of USD 32.83. Post the announcement of Q2FY24 results the stock has given a return of approx. 6.95%, with the current price breaking above an important resistance of USD 45.
• The price is currently trading above both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 69.06.

1.2 The Key Positives, Negatives, and Investment summary

1.3 Top 10 shareholders:

The top 10 shareholders together form ~37.18% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc., and Capital Research Global Investors, are the biggest shareholders, holding the maximum stake in the company at 8.41% and 5.31%, respectively.

1.4 Key Metrics

Between 2019 and 2023, Freeport-McMoRan (FCX) demonstrated a notable financial performance, reflected in both revenue growth and margin improvements. Revenue increased from USD 21,872 million in 2019 to USD 37,249 million by 2023. During the same period, gross profit surged significantly from USD 1,980 million in 2019 to USD 11,953 million in 2023, driven by operational efficiencies and improved market conditions. FCX’s gross margin followed a similar upward trajectory, rising from 9.05% in 2019 to 32.09% in 2023, despite some minor fluctuations after peaking at 39.04% in 2021. These figures underscore the company’s growing profitability and robust financial health over the past five years.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q2FY24:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 2.34% in the last three months, on the other hand a return of 5.29% in past six months.
• The stock is in its lower band of its 52-week range of USD 55.24 and 52-week low price of USD 32.83. Post the announcement of Q2FY24 results the stock has given a return of approx. 6.95%, with the current price breaking above an important resistance of USD 45.
• The price is currently trading above both its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 69.06.

 4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is September 25, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.