3Q Presentation
http://www.fcx.com/ir/2011present/FCX_3Q11CC_OCT11.pdf
FCX price target 72.8, using a 12.5 FCF multiple on 5.603 FCF and Net Cash of 1.6B. If there was 0% sales growth, using a multiple of 8 would still come up with a valuation of 47.
Cash of 5.1B and Debt of 3.5B or Net Cash of 1.6B. This is after paying out 1.2B in debt and spending 1.7B in CapEx through 3Q.
Cash costs for copper (after credits for byproducts) was $0.80 for the quarter. The low cash cost was due to higher credits (byproduct pricing was strong). For the year, cash costs are expected to be $0.95
On the conference call mgmt talked about a disconnect between the financial copper market and the physical copper market. The physical market is still extremely tight.
CapEx for 2011 is guided at 2.6B of which 1.4B is expansion, 1.2B is maintenance. Management did guide to an additional 1B in CapEx for next year as additional expansion projects are approved.
My only disappointment is that there was not any buyback activity, especially when the stock got crushed this quarter. Management is currently focused on expansion projects and making sure they are well-funded. There is currently a 5B authorization outstanding and the board is looking (as always) buybacks, supplemental dividends, and/or increasing the regular dividend. Management did buyback 1.2B of stock this year at (unfortunately) higher prices.
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