Long-Takes From The Road: Terminal Value

We would encourage those of you that only listen to or watch the video podcasts to read our written post from last week (here), as we plan to be more inclusive of coal, copper, and critical minerals going forward to go along with our analysis and commentary on traditional and new energy and power. The title was “Undirsuptable” and focused on the significant profitability and growth opportunities we see in oil, gas, coal, copper, and critical minerals amidst the A.I. boom and our new era of geopolitical competition.

This week we want to address a comment we received at an event last weekend about how we think about terminal value in especially the legacy areas of energy; we will add coal and copper to that list. In a nutshell, that was the point of last week’s post! Here is the punch line: Yes, we think traditional energy, coal, and copper companies are as a group deserving of terminal value recognition in their share prices especially for the leading companies that have most clearly demonstrated the potential for long-term returns and growth. We see the three key drivers of terminal value recognition as being (1) rising demand for all the raw material inputs to modern life; (2) double-digit full-cycle corporate-level returns on capital; (3) growth and risk taking.