The trajectory matters more than the level: ROE climbed from 1.0% in 2024Q4 to 3.6% in 2026Q3 and ROA from 0.5% to 1.9%, a steady compounding pattern consistent with the shift from Grasberg's capital-intensive build to harvest. However, with PP&E at roughly 69% of a $61.5B asset base and quarterly asset turnover stuck at 0.10-0.13 for two years, the return gap versus SCCO's 38.6% ROIC appears structural — driven by a far larger capital base rather than weak unit profitability. The key judgment: unless the proprietary leaching technology or North American expansion lifts the asset turnover ratio, ROIC may remain capped in the mid-single digits even through a favorable copper cycle.

The 15.7-point gross margin swing within three quarters is unusually wide for an operating business, and I read it as substantially price-driven — copper and gold pricing plus Grasberg byproduct credits — rather than durable cost reduction, which warrants caution in extrapolating the 33.8% figure into a mid-cycle normalized margin. SG&A held between $117M and $162M while gross profit roughly doubled, evidencing genuine fixed-cost operating leverage that should persist; true earning power therefore looks closer to the 24-28% operating margin band than to either the depressed 2025Q4 print or the current peak. For an analyst modeling attributable earnings, the operative question is not margin direction but the share split, since the 51.2% PT Freeport Indonesia interest appears to cap the parent's net margin at roughly half of operating profitability.

Inventory at nearly five months of revenue is the dominant working capital claim and appears to reflect both the physical reality of stockpiling concentrate and possibly higher-valued inventory at elevated copper prices — an important distinction, since the DIO lengthening in 2026 may be price-driven rather than a signal of sluggish sell-through. The encouraging offset is payables: DPO lengthened from 69 in 2024Q4 to 86 in 2026Q3, suggesting FCX is extracting more supplier float, which partially funds the inventory build without recourse to debt. Net working capital movements have swung from a $596M drag in 2026Q2 to a $510M source in 2025Q4, so I would caution against reading quarter-to-quarter CCC moves as efficiency signals; the trend line matters more, and it is drifting the wrong way.

The leverage story is one of dramatic repair: D/EBITDA above 8x at the 2025 trough versus under 4x today shows how quickly the ratio responds to EBITDA swings in a commodity business, and it implies the balance sheet has real cushion to withstand a copper price drawdown without covenant or refinancing pressure. The stress test, however, is the trough, not the peak: at 2025Q4-like EBITDA levels with debt near $10.4B, leverage would again exceed 8x, suggesting comfort is cycle-dependent even if absolute debt is flat. Given retained earnings swung from negative $970M in 2024Q2 to $3.8B in 2026Q3, the equity base now absorbs losses far better than in the prior cycle, which I interpret as genuinely improved refinancing capacity rather than a temporary artifact.

The P/E comparison flatters FCX superficially — 43.4x trailing against SCCO's 37.1x and TECK's 30.9x — but the 20.6x forward P/E and PEG of 1.45 argue that consensus expects earnings to normalize well above depressed trailing levels, consistent with the Grasberg harvest thesis. Versus mid-tier peers HBM (10.9x EV/EBITDA, 12.0% ROIC) and TECK (13.0x, 4.4% ROIC), FCX's multiple sits in the middle while its net margin of 15.6% trails HBM's 25.7%, indicating the market is neither pricing it as a premium compounder nor a distressed asset. The judgment: the structural part of the valuation gap appears justified by capital efficiency and the 51.2% NCI haircut on Grasberg earnings; the cyclical part is where the opportunity may lie if copper pricing holds.