Freeport-McMoRan: Grasberg Restarts, Now the Real Work Begins

Key Points

• Freeport stock fell over 10% as Grasberg production targets were cut despite an earlier-than-expected restart.
• Strong copper and gold prices continue to support the company’s long-term earnings outlook.
• Analysts remain bullish, suggesting the pullback could present an opportunity for patient investors.

Mining stocks can be complex investments. But the structural case for Freeport-McMoRan Inc. NYSE: FCX heading into earnings was straightforward. Unfortunately, that’s why FCX shot down over 12% after delivering its report.

The issue is the company’s Grasberg mine in Indonesia. Investors will remember that a mud rush at the mine forced a suspension of operations. 

The good news in this report was that Freeport was able to commence initial mining in March. This beat the company’s prior estimate for a restart sometime in the current quarter.

The bad news is that production is down. In January, the company set a target of 100,000 tons per day (t/d) by the second half of the year. However, that’s now been revised down to 60,000 t/d in the same time frame and 90,000 t/d by the second quarter of 2027.

The culprit is an increase in “wet drawpoints” that will require Freeport to make modifications that will run through March 2027.

Copper and Gold Prices Strengthen the Long-Term Bull Case

The Grasberg ramp-up is an issue for investors to watch closely. But is it a reason for a 12% sell-off? One reason to believe the stock will turn around is the case for copper, which has never been greater.

Demand for copper is at record levels and is expected to increase over the next few years. That’s lifting the price of copper, which has jumped to an average of $5.78 per pound in Q1 2026 from $4.44 in Q1 2025, a 30% increase.

However, Freeport is more than a copper story. The company also mines gold, which is trading at $4,889 an ounce as of this writing, up from $3,072 an ounce in April 2025. By 2030, Freeport is projecting to be mining up to 1.7 billion pounds of copper from Grasberg, along with approximately 1.2 million ounces of gold.

If current prices hold (and they’re projected to move higher), gold pays the bills, and the copper production bolsters earnings.

Freeport’s Earnings Show Strength Beyond Grasberg

Freeport’s Q1 2026 earnings report was solid, but mixed. Earnings per share (EPS) of 57 cents beat expectations of 47 cents per share. Revenue came in light at $6.23 billion. Analysts were expecting $6.4 billion.

The revenue picture significantly improves, however, on a year-over-year (YOY) basis. The $6.2 billion was a nice jump from the $5.7 billion it recorded in Q1 2025. And the company’s adjusted EBITDA also increased YOY from $1.9 billion to $2.5 billion.

For investors, this shows that while Grasberg still matters, the rest of Freeport’s portfolio remains strong. That means the Grasberg recovery story is likely to be one of incremental earnings growth rather than growth already priced into FCX.

Indonesia Agreement Removes a Key Overhang

Adding to the long-term bull case is reduced friction with the Indonesian government. Specifically, Freeport signed a memorandum of understanding (MOU) with the Indonesian government in February, extending operating rights in the Grasberg district beyond the 2041 expiration. Under the deal, Freeport retains its current 48.76% ownership stake in PT Freeport Indonesia through 2041, then transfers an additional 12% to the government at no cost, leaving it with roughly 37% from 2042 onward. This has been an issue hanging over the stock for some time. That clarity adds teeth to the long-term production story.

Is the Post-Earnings Sell-Off a Buying Opportunity?

In the weeks leading up to earnings, analysts have been mostly bullish on FCX. Many new price targets are above the consensus target of $65.66. Perhaps more significantly, 18 of the 22 analysts on MarketBeat rate the stock Buy.

Furthermore, institutions continue to buy the stock, and analysts are forecasting earnings growth of 35% in the next 12 months. That makes the company’s forward price-to-earnings (P/E) ratio of around 24X look attractive.

In short, FCX has a history of falling after earnings, so this may be a case of history repeating itself, particularly as a stock that’s up more than 64% in the last 12 months even after this pullback.

However, this seems overdone. It may be a case of a good but not great report happening on a day when the broader market was selling off. That’s where the opportunity may be set up for patient investors. The bad news is that FCX could test a level around $52, which would align with its 150-day simple moving average.

The move down after earnings happened on high volume, so there’s conviction behind the selling.

FCX took a similar path from September/October 2025, crossing below the 150-day SMA before recovering. That would be another 15% decline, which isn’t abnormal for commodity-leveraged stocks.

However, the 150-day SMA is still sloping upward, which suggests the underlying trend is still bullish, as are copper prices. If FCX can hold support around its 50-day SMA, the stock could test the current consensus price target.