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

Key Points

• Freeport-McMoRan, the self-styled "America's copper champion," dominates refined copper production in the U.S.

• The company has global operations but benefits inordinately from a premium in the U.S. price of copper versus the international price.

• Despite the setback, the stock looks like a great value.

• 10 stocks we like better than Freeport-McMoRan ›

Freeport-McMoRan (NYSE: FCX) shares were down by almost 10% during the week to Thursday at noon. The decline stems from the Trump administration's decision to exempt refined copper imports from 50% tariffs.

Freeport-McMoRan and copper tariffs

While the administration will tariff semi-finished goods such as wiring, electrical fittings, and pipes by 50%, the decision to exempt refined copper is a negative for Freeport. As Chairman Richard Adkerson noted on the recent earnings call, "We are the dominant producer in the U.S., producing over 70% of the country's refined copper."

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

As such, the company is a key beneficiary in times when the market is willing to pay a premium for the U.S. price of copper on the Commodity Exchange (COMEX) and the international price traded on the London Metal Exchange (LME). That premium was in play in 2025 as speculators pushed the COMEX price up as they rushed to buy copper ahead of a potential tariff on imports of refined copper.

Fast-forward to this week, and that premium abruptly disappeared, taking the COMEX price crashing down from about $5.60 per pound at the start of the week to about $4.35 per pound as I write.

What it means to the investment case for Freeport-McMoRan stock

According to Freeport's models, a 50% COMEX premium (a reasonable assumption if a 50% tariff had been imposed) would result in 20% higher earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2026-2027.

Image source: Getty Images.

Still, even with the premium dissipated and the COMEX and LME prices close to each other again at $4.35 per pound, Freeport should generate $12.9 billion in EBITDA, and with a current enterprise value of about $67.7 billion, it trades on 5.2 times EBITDA in 2026-2027. That's too cheap, and the stock remains attractive.

Should you invest $1,000 in Freeport-McMoRan right now?

Before you buy stock in Freeport-McMoRan, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Freeport-McMoRan wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $638,629!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,098,838!*

Now, it’s worth noting Stock Advisor’s total average return is 1,049% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.