Freeport-McMoRan Inc. (NYSE: FCX) is facing a sharp financial hit following a deadly mud rush at its Grasberg Block Cave mine in Indonesia on September 8, which claimed two lives and left five workers missing.
The incident is expected to trigger substantial near-term production deferrals and weigh on the company’s stock performance.
In response, Scotiabank analysts led by Orest Wowkodaw downgraded Freeport-McMoRan to Sector Perform from Sector Outperform, lowering the 12-month price forecast to $45 from $55.
Also Read: Freeport-McMoRan Confronts Hard Questions After Fatal Mud Rush In Indonesia
The revised valuation reflects a blend of 9.0 times projected 2026-27 EV/EBITDA and 2.0 times the updated 8% NAVPS estimate.
The Grasberg Block Cave, which accounts for about half of Grasberg’s reserves and roughly 70% of its copper and gold output through 2029, suffered extensive damage to equipment, rail and ore-handling systems, analysts said.
The bank stated that production at the affected mine is now expected to be negligible in the fourth quarter of 2025, with output in 2026 forecasted to be approximately 35% below prior guidance.
According to the brokerage, operations at the two unaffected mines in the complex, Big Gossan and Deep MLZ, are expected to resume by mid-fourth quarter 2025, while a phased restart of the Grasberg Block Cave is anticipated in the first half of 2026, with normal rates expected to be possible only in 2027.
Scotiabank cut its earnings forecasts for Freeport following the incident. Adjusted EPS is now projected at $1.29 in 2025 (down from $1.68 previously) and $1.16 in 2026 (down from $1.65), before recovering to $1.49 in 2027.
However, the bank noted, revenues are projected to be $24.98 billion in 2025, $26.02 billion in 2026, and $29.01 billion in 2027, representing an increase.
The brokerage cut its 2025-26 EBITDA estimates by an average of 27% to $8.4 billion and $9.0 billion, and lowered its net asset value estimate by 10% to $19.15 a share. It now sees sharply weaker free cash flow over 2025-27, with buybacks unlikely to ramp up until after 2026.
Price Action: FCX shares were trading lower by 5.51% to $35.60 at last check Thursday.
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Photo by Jose Luis Stephens via Shutterstock
Date
Firm
Action
From
To
Mar 2022
Deutsche Bank
Maintains
Hold
Mar 2022
Jefferies
Maintains
Buy
Jan 2022
Deutsche Bank
Maintains
Hold
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