Freeport Stock Falls Further, But It May Be Time To Buy

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FCX: Freeport logo
FCX
Freeport

The stock price of Freeport-McMoRan (NYSE: FCX) one of the largest producers of copper, has declined by about 4% over the last week (five trading days) and remains down by 35% over the last month. This compares to the S&P 500 which remains down by about 7% over the last month. Copper prices are down from a high of about $4.86/lb in early March 2022 to about $3.50/lb currently, marking a decline of almost 28%. Although there are multiple long-term drivers of copper demand, including rising demand from the renewable energy sector and the electric vehicles market, the near-term outlook for the commodity is somewhat bearish. With inflation surging, the U.S. Federal Reserve and other central banks have been hiking interest rates at a more aggressive pace and the markets are betting that this will hurt economic growth. The construction and electrical applications sectors – which are the largest consumers of copper – typically see activity cool off during downturns and this could impact demand and pricing for the metal. Separately, the recent Covid-19-related lockdowns in China, one of the largest copper consumers, have also impacted demand for the commodity, hurting prices.

However, now that FCX stock has seen a decline of about 35% over the last month, will it continue its downward trajectory in the near term, or is a rally imminent? Going by historical performance, there is a strong chance of a rise in FCX stock over the next monthOut of 45 instances in the last ten years that FCX stock saw a twenty-one-day decline of 35% or more, 33 of them resulted in FCX stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 33 out of 45, or about 73% chance of a rise in FCX stock over the coming month, implying a positive near-term outlook for the stock. See our analysis on  Freeport-McMoRan Stock Chance of A Rise for more details.

While FCX stock has declined recently, several peers in its sector still look like a better bet than Freeport. Check out how Freeport Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Relevant Articles
  1. Will Freeport Stock Fall Further?
  2. With Copper Prices Falling, What’s Next For Freeport Stock?
  3. Why did Freeport-McMoRan Stock Lose 30% In Value?
  4. Is Freeport-McMoRan Stock A Buy?
  5. How Has Resistance In Copper Prices Impacted Freeport-McMoRan Stock?
  6. Amidst Strong Rally In Copper Price, Will Freeport-McMoRan Stock Continue To Shine?

Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years data

  • After moving -4.3% or more over five days, the stock rose in the next five days on 48% of the occasions.
  • After moving -5.3% or more over ten days, the stock rose in the next ten days on 55% of the occasions
  • After moving -35% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 73% of the occasions.

This pattern suggests that FCX stock is likely to see gains in the near term.

With inflation rising and the Fed raising interest rates, Freeport has fallen 33% this year. Can it drop more? See how low can Freeport stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Jul 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 FCX Return -4% -33% 112%
 S&P 500 Return 3% -18% 74%
 Trefis Multi-Strategy Portfolio 6% -18% 221%

[1] Month-to-date and year-to-date as of 7/10/2022
[2] Cumulative total returns since the end of 2016

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