Here’s Why We’re Revising Our Price Estimate For Freeport-McMoRan To $12

We are raising our price estimate for Freeport-McMoRan by 43%, which is primarily driven by an improvement in our pricing and margin forecasts for the oil and gas division. An improvement in the pricing outlook for crude oil due to a more favorable global demand-supply equation, resulting from an expected reduction in U.S. oil and gas output over the course of the year, as well as supply outages in Canada and Nigeria, have prompted us to revise our forecast for realized prices for Freeport’s oil and gas division. An improvement in the pricing outlook as well as production from low-cost sources has prompted us to raise our margin forecasts for the division, as well. In addition, we have revised our margin forecasts for the South American and Indonesian copper mining divisions due to an upward revision in production forecast and the mining of higher grade ore, respectively. In addition, an improvement in the outlook for gold prices and a revision to the production forecast has prompted us to revise our margin forecasts for the gold mining division, as well.

Have more questions about Freeport-McMoRan? See the links below.

• What Is Freeport-McMoRan’s Fundamental Value Based On 2015 Results?
• What Is Freeport-McMoRan’s Revenue And EBITDA Breakdown?
• How Has Freeport-McMoRan’s Revenue Composition Changed Over The Last 5 Years?
• By What Percentage Did Freeport-McMoRan’s Revenue & EBITDA Decline Over The Last 5 Years?
• By What Percentage Can Freeport-McMoRan’s Revenue & EBITDA Change Over The Next 3 Years?
• How Will Freeport-McMoRan’s Revenue Composition Change by 2020?
• Why Have Copper Prices Declined Over The Past Year?
• Why Is China Important For The Global Copper Industry ?

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