Is Freeport-McMoRan, Inc. overvalued or undervalued?

As of 11 June 2025, Freeport-McMoRan, Inc. has moved from a fair valuation to an expensive one. The company is currently considered overvalued based on its financial metrics. The P/E ratio stands at 17, while the industry average P/E is significantly higher at 23.57, indicating that Freeport-McMoRan's earnings are priced lower than its peers. Additionally, the EV to EBITDA ratio is 8.47, which is relatively close to the peer average of 12.99 for Southern Copper Corp., further supporting the overvaluation assessment.
In terms of financial performance, Freeport-McMoRan boasts a ROCE of 27.45% and a ROE of 21.33%, which are strong indicators of profitability. However, the company's dividend yield of 1.65% does not provide sufficient compensation for the current valuation. Notably, while Freeport-McMoRan has outperformed the S&P 500 on a 5-year basis with a return of 269.49% compared to 92.42%, its recent 1-year performance shows a decline of 17.39%, contrasting sharply with the S&P 500's gain of 10.26%. This decline further emphasizes the stock's current overvaluation.