Erste Group initiates Freeport-McMoRan stock with buy rating

Erste Group has initiated coverage on Freeport-McMoRan Inc. (FCX) with a buy rating, noting the stock's strong performance over the past year. Trading at $79.11, FCX is close to its 52-week high of $80.24. Analyst Hans Engel anticipates a decline in copper and gold production volumes in 2026 due to increased mining activity in Indonesia.

However, molybdenum remains a stable byproduct in North and South American open-pit mines. Freeport-McMoRan forecasts $8.3 billion in operating cash flow for 2026, based on conservative metal price assumptions. The stock's current valuation appears overvalued according to InvestingPro data, but it has a reasonable PEG ratio of 0.71, suggesting fair valuation relative to growth expectations.

Engel expects revenue and profit growth to outperform sector averages this year and next. Freeport-McMoRan surpassed expectations in the second quarter of 2026, reporting $0.74 earnings per share and $7.03 billion in revenue, both exceeding analysts' forecasts. Despite this, the stock fell in premarket trading, as investors raised concerns about capital spending, project timing, and mixed outlooks for certain operations.