2024-04-27 01:19:54 ET
Summary
- The management followed the upbeat trend, forecasting an average copper price of $4.25/lb and $2,300/oz for gold in 2024.
- A sensitivity analysis with copper and gold prices just 2% and 5% below guidance would give FCX a fair price of $42 per share.
- With margin compression in Q1 due to increased production and delivery costs and stagnating production for the year, the current range makes a sound opportunity to take some profits.
Fiscal Year 2024: Aggressive Guidance Update
Freeport's ( FCX ) management surprised us with upbeat guidance for 2024 above January estimates:
The sales outlook remained similar at 4.15 billion lbs . Still, the site production and delivery costs forecast (a subset of unit net cash cost) has increased from $2.37/lb to $2.40/lb, which is still a bold assessment given that Q1 costs came in at $2.48/lb and projected a slightly higher number for Q2 at $2.52/lb....
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Freeport-McMoRan: Bold Management Guidance Warrants Taking Some Profits