FCX — Freeport-McMoRan Inc.

Q2 2026 was a clear beat: adjusted EPS of $0.74 versus $0.59 consensus, on revenue of $7.03B. The stock is near 52-week highs, analyst ratings are heavily Buy-skewed, and the copper electrification/AI/data-center narrative is powerful. The elevated put/call ratio near 1.69 and recent insider selling are caution flags, but the prevailing market mood is optimistic.

Revenue has been choppy but is inflecting upward from the Q4 2025 trough: Q4 2025 fell to $5.63B, then Q1 2026 recovered to $6.23B and Q2 2026 reached $7.03B. Q2 2026 revenue was down 7.3% YoY against an unusually strong $7.58B base, but net income rose 27% YoY to $984M and diluted EPS rose to $0.68 from $0.53. Operating margin compressed from 32.1% in Q2 2025 to 28.5% in Q2 2026, yet the trailing EPS of $2.04 is the strongest in the window—so the trend is a cyclical recovery, not structural decay.

Expensive as of 2026-08-27. The TTM P/E is 38.6x versus the 5-year average of 25.1x, and the P/S ratio of 4.36x is well above the 5-year average of 2.56x. Even on the more relevant forward EPS estimate of $2.94, the stock trades at about 26.7x, still above its own historical average. The PEG of 0.72 only makes sense if the market correctly expects the ~40% forward EPS growth to materialize.

At $78.43, the stock is pricing in continued copper strength and EPS growth toward the $2.94-$3.00 level, not just the current $2.04 TTM EPS. If copper holds and Grasberg volumes improve, the current price can be justified; if the cycle stalls, misses guidance, or capex surprises to the downside, the multiple has significant room to compress. This is a 'paying up for future perfection' setup.

As of 2026-08-27, RSI was 68.65—strong momentum but just below the 70 overbought threshold. Price was 11.3% above the 20-day SMA, 19.8% above the 50-day SMA, and 30.9% above the 200-day SMA, so the trend is clearly up but also stretched. For a new buyer, the trend is friendly but entry timing is poor; a pullback toward the 20- or 50-day SMA would be a more attractive spot.

• Copper demand from electrification, grid investment, AI data centers, and electric vehicles
• China's industrial cycle and property/construction demand, which drive marginal copper consumption
• Global interest rates and the US dollar direction, which affect commodity pricing and financial flows
• Supply-side constraints including ore grades, mine permitting, and copper inventory levels
• Jurisdictional and operational risk in Indonesia and South America, especially Grasberg

• Q3 2026 earnings in late October 2026, with focus on Grasberg ramp-up and updated 2027 capex guidance
• Leach pad expansion targeting 300-400 million pounds of additional copper production in 2026-2027
• Further copper price strength or a Chinese stimulus/infrastructure program
• Potential shareholder returns through buybacks or dividend increases as free cash flow builds

• A sharp copper price correction or renewed China demand weakness
• Operational, regulatory, or labor issues at Grasberg in Indonesia
• The heavier 2027 capex plan ($4.8B) reducing free cash flow below expectations
• Rich valuation with little margin of safety if the expected earnings jump is delayed or undershoots

FCX is a high-quality, cyclical copper producer with a healthier balance sheet and real long-term demand tailwinds. But at $78.43, a 38.6x trailing P/E, and RSI near overbought, the stock already prices in continued copper strength and strong EPS growth. The risk/reward for a new position is unattractive until price or estimates reset to a more reasonable margin of safety.

I applied the 5-year average trailing P/E of 25.1x to the consensus next-fiscal-year EPS estimate of $2.94, giving $73.85. That uses FCX's own historical valuation anchor rather than the current 38.6x TTM multiple or the 26.7x forward multiple, and it lands just below the current price—consistent with the idea that the stock is slightly ahead of intrinsic value.