The Impact of Freeport’s Mud Rush Disaster on Its Stock

Freeport-McMoRan Faces Financial Setback After Tragic Incident

Freeport-McMoran Inc. (NYSE: FCX) is experiencing a significant financial downturn following a deadly mud rush at the Grasburg Block Cave Mine in Indonesia on September 8th. The incident resulted in two fatalities and left five workers unaccounted for.

This situation is likely to lead to notable short-term production delays, which could impact the company’s stock performance.

In light of these events, analysts at Scotiabank, under the direction of Orest Wowkodaw, have downgraded Freeport-McMoran’s standing within the sector and reduced its twelve-month price target from $55 to $45.

The updated rating takes into account an anticipated blend of 9.0 for the 2026-27 EV/EBITDA and 2.0 times the new 8% NAVPS estimate.

Analysts note that the Grasberg Block Caves contribute significantly to Grasberg’s overall production—about half of its reservoir and approximately 70% of its copper and gold output projected until 2029. The mud rush has inflicted considerable harm on equipment, railroads, and ore treatment facilities.

Looking ahead, production from the affected mines is anticipated to remain minimal during the fourth quarter of 2025, with output expected to drop about 35% compared to previous forecasts.

The operations of two other mines in the complex, Big Gossan and Deep MLZ, are set to resume by mid-April 2025. Meanwhile, it’s expected that activities in the Grasberg Block Caves will be phased out in the first half of 2026, with normal operations possibly resuming in 2027.

As a follow-up to the incident, Scotiabank has adjusted its revenue forecasts for Freeport. The earnings per share (EPS) estimates have been modified to $1.29 for 2025 (down from $1.68) and $1.16 for 2026 (down from $1.65), with projections returning to $1.49 by 2027.

In terms of revenue, forecasts stand at $249.8 billion for 2025, $260.2 billion for 2026, and $29.01 billion for 2027.

The brokerage has also reduced its EBITDA estimates for 2025-26 by approximately $8.4 billion, adjusting the net asset value estimate down by 10% to $19.15 per share. It’s noted that there will be weak free cash flow between 2025 and 2027, and buyback opportunities won’t be viable until 2026 or beyond.