A Freeport-McMoRan (FCX) Special Dividend or Massive Buyback Could Be Coming in 2022 - Jefferies
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Jefferies analyst Christopher LaFemina reiterated a Buy rating and $60.00 price target on Freeport-McMoRan (NYSE: FCX) noting that at current spot copper and gold prices, the company should be in position to deliver surplus capital returns as soon as 3Q21, with a $3.2bn buyback and/or special dividend in 2022 and $8.2bn of potential buybacks/specials from 2022-24.
The analyst stated "if the copper price stays near the current level or rises further. On our estimates, assuming pre-growth annual capex of $2.2bn, free cash flow available for performance-based payments to shareholders, growth, and balance sheet strength would be $6.4bn for 2022, $5.0bn for 2023, $5.0bn for 2024, and $4.8bn for 2025. If we assume 50% of this is allocated to performance-based payments, this would imply surplus capital returns of $3.2bn for 2022 and about $2.5bn/yr for 2023 and 2024 at the current spot copper price of $4.52/lb."
Shares of Freeport-McMoRan closed at $40.68 yesterday.
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