From Credit Suisse, Jan. 26, 2022
Freeport-McMoRan reported 4Q21 adj. EBITDA of $3.2bn, broadly inline with consensus /
CSe at $3.2bn/$3.1bn. Q4 adj. EPS came at $0.96 vs. consensus at $0.96. On segment level, better than expected performance at gold was offset by slightly weaker volumes in copper / molybdenum. 4Q21 gold sales of 395koz was up +35% y/y and came 5% ahead of CSe/Consensus at 378/377koz. Updated FY22 guidance reflects copper sales outlook revised down by 100Mlbs to 4.3Blbs and 2022 capex (ex-smelter) guide further raised by $0.4bn to $3.3bn now. Note the FY22 was previously raised by $0.4bn to $2.9bn with Q3 results, mainly due to the announcement of Kucing Liar project. FY24 copper sales guide was introduced at 4.2Blbs, 5% below CSe at 4.4Blbs. We maintain our Underperform rating with an unchanged TP of $29.
Valuation and TP: Our $29 target price assumes FCX trades at an owned FCF yield of 6.4%
on 2022 or 7.4% on 2023 estimates. We value FCX on “owned” basis to reflect PT-FI ownership
stepdown. Blended target multiple on EV/EBITDA for 2022-23 is 6.5x. Key risks include higher copper prices, better execution at Grasberg, and potential for additional US / China stimulus.