Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Freeport-McMoRan Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 12.6% to -8.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 25, DPO 58, DIO 133). At a 8.0% WACC with mid-year discounting, the terminal value (89% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $145.48 per share, suggesting FCX is undervalued by 161.4% at the current price of $55.65.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 8,043 | 9,612 | 9,821 | 10,722 | 9,798 | 10,043 |
| (−) Net Interest | 583 | 696 | 711 | 777 | 710 | 727 |
| (+) D&A | 3,942 | 4,469 | 4,911 | 5,106 | 5,411 | 5,546 |
| EBITDA | 12,568 | 14,777 | 15,442 | 16,604 | 15,918 | 16,316 |
| (−) Tax | 2,777 | 3,318 | 3,390 | 3,701 | 3,382 | — |
| (−) CapEx | 4,750 | 5,677 | 5,800 | 6,332 | 5,787 | — |
| (−) ΔWC | -170 | 1,181 | 157 | 678 | -695 | — |
| Free Cash Flow (FCF) | 5,211 | 4,602 | 6,095 | 5,892 | 7,445 | — |
| Peers' EBITDA Multiple | 17.5x | |||||
| Terminal Value | 285,370 | |||||
| WACC / Discount Rate | 8.01% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 5,014 | 4,100 | 5,028 | 4,500 | 5,264 | 194,168 |
| Enterprise Value | 218,074 | |||||
| Projection Period | 23,906 | 11.0% | ||||
| Terminal Value | 194,168 | 89.0% | ||||
| (−) Current Net Debt | 8,148 | |||||
| Equity Value | 209,926 | |||||
| (÷) Outstanding Shares | 1443M | |||||
| Fair Price | $145 | +161.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.5x | 15.5x | 17.5x | 19.5x | 21.5x |
|---|---|---|---|---|---|
| 6.0% | $126 | $143 | $159 | $176 | $193 |
| 7.0% | $120 | $136 | $152 | $168 | $185 |
| 8.0% | $115 | $130 | $145 | $161 | $176 |
| 9.0% | $110 | $124 | $139 | $154 | $168 |
| 10.0% | $105 | $119 | $133 | $147 | $161 |
Current price: $55.65. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.