It’s no secret that mining commodity prices, in this case copper and lithium, can be volatile, and it’s hard to predict where they are heading. Still on the basis that current prices are the best estimate of where prices will be in a year or so, both Freeport-McMoRan (NYSE: FCX) and Albemarle (NYSE: ALB) look like unmissable value. Here’s why.
Ultimately, the idea is that both stocks have less downside potential than upside, making them good value stocks looking for asymmetric stock picks. Freeport-McMoRan looks like a great value for three reasons.
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First, in every earnings presentation, the company lays out its earnings before interest, taxes, depreciation, and amortization (EBITDA) sensitivity to copper prices. The last update for EBITDA in 2027/2028 assumes $11 billion at a price of copper of $4 per pound, and $19 billion at a price of $6 per pound. Given that the current price is $5.66, a rough estimate would be $17.6 billion, and assuming the current enterprise value (EV) of $96.9 billion, Freeport would trade on an EV/EBITDA multiple of just 5.5 times in 2027 — a historically very favorable valuation.
Second, as discussed elsewhere, Freeport is set to ramp up production in Indonesia over the next few years following a tragic accident last year.
Third, the company’s leaching initiative (a low-cost way to recover copper from existing stockpiles) continues to gain traction. Management has baked in an assumption of 250 million to 300 million pounds into its 2026 guidance (included in the chart above), but beyond that, it hasn’t included the 400 million pounds it expects to hit in 2027, or anything else, as it ramps to 800 million pounds by 2030. As such, there’s upside potential for the company’s copper sales volumes, and given its already attractive valuation, Freeport is an excellent buy for investors comfortable with copper.
A big drop in lithium prices, caused by less investment in electric vehicles after the pandemic boom, led to a sharp decline in Albemarle’s income starting in 2022. Consequently, the company reported losses in 2024 and 2025.
However, management didn’t stand still and, having divested noncore businesses and cut costs, it’s now positioned to benefit from the recent price pickup.
Like Freeport, Albemarle’s valuation appears appealing given current lithium prices. In January, the average price of lithium carbonate equivalent (LCE) was $20 per kg. If this price holds through 2026, Albemarle could earn $2.4 billion to $2.6 billion in EBITDA. With a current EV of $23.5 billion, this would equate to an EV/EBITDA ratio of 9.4 for 2026.
