Freeport-McMoRan Inc. (FCX) is Attracting Investor Attention: Here is What You Should Know

Freeport-McMoRan (FCX) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.Over the past month, shares of this mining company have returned -4.8%, compared to the Zacks S&P 500 composite's +3.8% change. During this period, the Zacks Mining - Non Ferrous industry, which Freeport-McMoRan falls in, has lost 10.4%. The key question now is: What could be the stock's future direction?While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.Freeport-McMoRan is expected to post earnings of $0.40 per share for the current quarter, representing a year-over-year change of +48.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.3%.For the current fiscal year, the consensus earnings estimate of $1.50 points to a change of -2.6% from the prior year. Over the last 30 days, this estimate has changed -1.4%.For the next fiscal year, the consensus earnings estimate of $2.01 indicates a change of +34.1% from what Freeport-McMoRan is expected to report a year ago. Over the past month, the estimate has changed -4.6%.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Freeport-McMoRan.The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSRevenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.For Freeport-McMoRan, the consensus sales estimate for the current quarter of $6.07 billion indicates a year-over-year change of +2.8%. For the current and next fiscal years, $25.9 billion and $27.12 billion estimates indicate +13.3% and +4.7% changes, respectively.Last Reported Results and Surprise HistoryFreeport-McMoRan reported revenues of $6.79 billion in the last reported quarter, representing a year-over-year change of +16.6%. EPS of $0.38 for the same period compares with $0.39 a year ago.Compared to the Zacks Consensus Estimate of $6.46 billion, the reported revenues represent a surprise of +5.12%. The EPS surprise was -5%.Over the last four quarters, Freeport-McMoRan surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Freeport-McMoRan is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Freeport-McMoRan. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.Free: 5 Stocks to Buy As Infrastructure Spending SoarsTrillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Freeport-McMoRan Inc. (FCX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks