Freeport-McMoRan Inc's (FCX) stock has fallen by 37% so far in 2018, and technical analysis suggests the stock may drop by an additional 23%. The weakness comes as analysts slash their earnings estimates for the third quarter. 

One reason for the weaker profit forecasts is a declining copper price. Since the middle of June, the price of copper has dropped by 15% to $2.80 per pound. 

FCX Chart

FCX data by YCharts

A 23% Decline

The chart shows that the price of Freeport has been trending lower since the beginning of 2018. The stock is now sitting above technical support at $11.85. Should the stock fall below that support level it may drop to as low as $9.25, a decline of 23% from its current price of around $12. 

Another negative sign is that the relative strength index has been steadily trending lower as well since the end of 2017. It suggests that momentum is still leaving the stock. 

Slashing Estimates 

Analysts have slashed their third-quarter earnings estimates by 43% since July to $0.32 per shares. Additionally, revenue estimates have fallen by 10% to $4.6 billion. 

More problematic is that analysts have been slashing their full-year forecast for the company as well. For example, analysts now see 2018 earnings climbing by 47% from prior estimates for growth of 69%. Revenue estimates have come down as well and are now forecasted to rise by 14% from previous estimates of 16%. 

The forecast for 2019 is worse because analysts now see earnings falling by 50% from prior estimates for a decline of 42%. Revenue growth estimates have come down slightly as well. 

FCX EPS Estimates for Current Fiscal Year Chart

FCX EPS Estimates for Current Fiscal Year data by YCharts

Price Targets Falling

Despite the dire earnings and revenue outlook for the company, analysts still see the stock rising by 36% to an average price target of $16.37.  However, that price target is likely too high, and analysts have reduced that target since July. 

It may not seem possible, but the outlook for the company may even get worse if the price of copper continues to fall. Should that happen, it may result in analysts having to cut earnings and revenue estimates even further, which may result in the stock price falling even more dramatically.