Freeport-McMoRan, Inc. (NYSE:FCX) moved to reset expectations for its flagship Grasberg mine after completing its investigation into September’s mud-flow incident, issuing lower-than-expected multi-year production guidance while signaling that the worst of the operational overhang is easing.
Scotiabank analyst Orest Wowkodaw upgraded Freeport-McMoRan to Sector Outperform from Sector Perform after the company issued updated production and capex guidance for its Indonesian Grasberg mine.
Although the new 2026–27 outlook came in below his prior expectations, Wowkodaw argues that improved multi-year visibility, a strong balance sheet, and attractive medium-term valuation create a favorable risk-reward setup.
Also Read: Freeport-McMoRan Q3 FY25: Strong Earnings, Copper Production Supports Growth
He reduced his 12-month price forecast to $47 from $51, explaining that this valuation is derived from a 50/50 blend of 7.5× average 2026E 2027E EV/EBITDA and 1.8× the firm’s 8% NAVPS estimate.
Wowkodaw notes that Freeport completed its investigation into the September mud-rush incident that forced a temporary shutdown at the Grasberg Block Cave (GBC), which contains roughly half of the district’s reserves.
About 800,000 tonnes of wet material moved through multiple levels, damaging infrastructure in the PB1C zone and slowing recovery in PB1S and PB1C.
While the DMLZ and Big Gossan mines restarted in October, Freeport now plans a phased GBC restart beginning in the second quarter of 2026 with a longer ramp-up period.
According to Wowkodaw, Freeport now expects 2026 output of 1.0B lbs of Copper (Cu) and 0.9M oz of Gold (Au), falling 8% and 14% below his prior forecasts.
Updated 2027 guidance of 1.5B lbs Cu and 1.2M oz Au is 15% and 19% lower than previously modeled. However, 2028–29 estimates remain broadly in line. Additionally, 2026 capex guidance decreased to $4.1B versus his $5.2B estimate, reflecting deferred spending.
Wowkodaw cut his 2025–27 EBITDA forecasts by roughly 11% annually and trimmed his 8% NAVPS estimate to $23.04. Even with downward revisions, he highlights FCX’s discounted EV/EBITDA multiples--8.4×, 7.0×, and 5.3×--relative to large-cap copper peers.
Among other analyst revisions, Morgan Stanley’s Carlos De Alba maintained his Overweight rating on Freeport-McMoRan while lowering his price target from $46 to $44.
Similarly, BMO Capital Markets analyst Katja Jancic reiterated her Outperform rating and trimmed her price target from $48 to $47, reflecting updated assumptions following the company’s revised operational outlook.
Price Action: FCX shares were trading higher by 3.42% to $41.37 at last check Wednesday.
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