Here's Why Freeport-McMoRan Stock Crashed This Week (Hint: It's Trump Tariff-Related.)

Freeport-McMoRan (FCX) shares dropped nearly 10% after the Trump administration exempted refined copper imports from a 50% tariff, eliminating the U.S. COMEX copper price premium over international LME prices. This decision negatively impacts FCX, the dominant U.S. refined copper producer, as the premium would have significantly boosted future EBITDA. Despite the immediate price drop and loss of this potential upside, the company is still projected to generate substantial EBITDA, making the stock appear undervalued at 5.2 times estimated 2026-2027 EBITDA.

Analysis

Freeport-McMoRan (FCX) shares experienced a significant decline, falling nearly 10% within the week, following the Trump administration's decision to exempt refined copper imports from a proposed 50% tariff. This policy move directly unwound a speculative trade that had created a substantial premium for U.S. copper on the Commodity Exchange (COMEX) versus the London Metal Exchange (LME) price. The COMEX price subsequently corrected sharply from approximately $5.60 to $4.35 per pound, erasing the premium. As the dominant domestic producer, supplying over 70% of the country's refined copper, FCX was uniquely positioned to benefit from the tariff; the company had projected that the resulting price premium would have increased its 2026-2027 EBITDA by 20%. Despite the removal of this significant tailwind, the company's valuation appears compelling. Based on a copper price of $4.35 per pound, FCX is projected to generate $12.9 billion in EBITDA in 2026-2027, which, against an enterprise value of $67.7 billion, implies an attractive forward multiple of 5.2x.

Key Decisions for Investors

• Investors could view the recent 10% share price drop as a value opportunity, given the stock now trades at a 5.2x forward EV/EBITDA multiple for 2026-2027 even without the tariff catalyst.
• The investment thesis is now more sensitive to the fundamental copper price, and portfolio managers should monitor the stability of copper around the $4.35 per pound level to validate the projected $12.9 billion in EBITDA.
• Be aware that the primary speculative driver for the stock has been removed, shifting the focus from trade policy speculation to long-term operational execution and global copper supply-demand dynamics.