Erste Group on Wednesday initiated coverage of Freeport-McMoRan Inc. with a Buy rating, citing robust operational cash flow potential and valuation support based on a 2026 projection of $8.3 billion.
Analyst Hans Engel highlighted the copper and gold producer’s second-quarter 2026 adjusted earnings per share of $0.74, exceeding Wall Street consensus by 25.4% and surpassing revenue estimates of $6.71 billion by 4.8%, with reported revenue at $7.03 billion. The firm’s PEG ratio stands at 0.71, indicating a valuation below growth expectations, according to InvestingPro data.
Freeport-McMoRan’s current share price of $79.11 remains 1.4% below its 52-week high of $80.24, while the stock has gained 82% over the past year. Despite the positive earnings surprise, shares fell in pre-market trading amid investor concerns over elevated capital expenditures, revised project timelines, and mixed operational outlooks.
Engel noted that copper and gold production volumes are expected to decline in 2026 due to the gradual restart of operations in Indonesia. Molybdenum output, primarily extracted as a byproduct in open-pit mines across North and South America, is projected to remain stable given consistent primary production levels. The analyst emphasized that Freeport-McMoRan’s revenue and earnings growth are expected to outperform sector averages in the current and next fiscal year, underpinning the Buy recommendation.
