The market is about right: the share price requires expensive copper and a substantial production recovery. I expect both, but shipment delays and expansion spending limit the reward. My twelve-month target is $78.21.
Key points
- $6.21 per pound is the 2027 copper price today's shares require in my model.
- 3.8 billion pounds of 2027 copper sales underpin my recovery forecast.
- $78.21 per share is my twelve-month target, supporting a hold.
The call
The market is about right. At my chosen earnings multiple, today's share price requires copper averaging $6.21 per pound in 2027 and the planned production recovery. Higher volumes must become shipments, not inventory. Gold sales also matter because their proceeds reduce the reported cost of producing copper.
Gold credits cut reported copper cash costs ($ per pound)- Mine production and delivery costs
- After credits and other cash costs
Source: FCX July 23, 2026 presentation, slide 16; second-quarter 2026 reported costs.
I expect recovery, not another copper-price surge. My forecast assumes copper averages $6.50 per pound in 2027, with gold at $4,000 per ounce. October's update supports the mine-recovery schedule, but does not prove deferred gold has shipped. My sell-heavy record argues against treating valuation alone as a reversal catalyst.
Valuation
| My estimate or method | Figure |
|---|
| 2027 copper sales | 3.8 billion pounds |
| 2027 average copper price | $6.50 per pound |
| 2027 earnings belonging to FCX shareholders | $6.27 billion |
| 2027 diluted earnings | $4.35 per share |
| Twelve-month earnings multiple | 18 times |
| Twelve-month target | $78.21 per share |
Our model: 2027 volumes, costs, taxes and minority ownership held fixed; 18 times earnings.
I assign 16 times earnings to the operating business and another two times, worth about $8.69 per share, to its scarce U.S. copper franchise. That premium depends on durable electricity demand and credible expansion economics, not an assumed tariff benefit. Falling copper offers more downside than successful recovery alone offers upside, keeping the rating at hold.
Risks
- Recovery slips: watch the mid-2027 capacity milestone and whether deferred gold becomes fourth-quarter sales; PT Smelting's current operating status remains unverified.
- Copper demand weakens: watch sustained lower monthly prices and rising exchange stocks, especially if a stronger dollar or expensive financing slows construction.
- Cash disappoints: watch inventory, Indonesian cash restrictions and expansion approvals; second-quarter cash generation included an insurance settlement, while Bagdad spending remains outside capital guidance.
What would change my mind
I would lower the target if 2027 copper-sales guidance falls below 3.6 billion pounds or quarterly copper realizations fall below $6.00 per pound without offsetting cost improvements.
