Freeport-McMoRan Stock Soars 500% – What Has Changed?

SectorFinancial Markets
CountryMiddle east

KIEV, UKRAINE - 2018/12/18: In this photo illustration, the Freeport-McMoRan Mining company logo ... [+] seen displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images) LightRocket via Getty Images Freeport-McMoRan stock (NYSE: FCX) has increased an astonishing 6x since its March lows of 2020 and at the current price of $30, we believe the stock is slightly overvalued. FCX stock has rallied from $5 to $30 off its recent bottom compared to the S&P 500 which increased 70% from its March lows.

The stock was able to beat the broader market in the last few months as gold prices have shot up significantly and remained elevated during the ongoing pandemic, while copper prices, which had dropped after the outbreak of coronavirus, have also recovered at a significant pace with stimulus measures announced by various economies. However, gold prices have remained volatile recently and, in fact, have declined from over $2,000/ounce in August 2020 to about $1,860/ounce in January 2021. Though FCX’s revenue will see a sharp rise in 2021 due to higher output from Indonesia, volatility in gold prices could affect the earlier projections about FCX’s revenue growth. We believe more...