Is Freeport-McMoran Copper & Gold Inc (FCX) overvalued?
On Equity Rank's model estimate, FCX trades 24% above its fair value. Freeport-McMoran Copper & Gold Inc (FCX) last closed at $59.42; the multi-method model fair value is $48.02.
| Price | Model fair value | Price vs model |
|---|---|---|
| $59.42 | $48.02 | 24% above |
What the answer rests on
- 0 of 12 valuation methods put FCX's value above its price and 12 put it below, so the methods mostly agree.
- To justify today's price, FCX's free cash flow would need to grow about 28.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -12.6% a year.
- FCX trades at 26.3 times its last year's earnings, against a median of 12.1 for 36 profitable Mining companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 20% above to 97% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind FCX's fair value · What prices assume · Other companies