Southern Copper Corporation
SCCO
$197.00
+0.94%
Southern Copper Corporation is an integrated copper producer with mining, smelting, and refining operations primarily in Peru and Mexico, also producing molybdenum, zinc, silver, and other by-products. As one of the world's largest publicly traded copper mining companies, it holds a competitive edge through its low-cost operations and substantial mineral reserves, positioning it as a key player in the global copper supply chain. The current investor narrative centers on copper's critical role in electrification and AI-driven infrastructure demand, with recent news highlighting copper's structural shift as a growth commodity, yet the stock faces headwinds from geopolitical tensions and mixed analyst sentiment, as reflected in a cautious underperform consensus.…
SCCO
Southern Copper Corporation
$197.00
Related headlines
Investment Opinion: Should I buy SCCO Today?
Based on the analysis, SCCO is rated a Hold. The company's strong fundamentals and growth prospects are offset by a premium valuation and cautious analyst sentiment. The average analyst target of $168.25 implies a downside of -7.9%, suggesting the stock is currently overvalued relative to analyst expectations. However, the company's exceptional margins and revenue growth provide a solid foundation, making it a quality holding for long-term investors.
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SCCO 12-Month Price Forecast
The AI assessment is neutral, reflecting a balance between strong fundamentals and valuation concerns. SCCO's revenue growth and margins are exceptional, but the premium valuation and analyst skepticism limit upside. The stock is likely to trade in a range, with the outcome depending on copper price trends and operational execution. An upgrade to bullish would require copper prices to sustain above $5.00/lb and analyst targets to rise, while a downgrade to bearish would occur if copper prices fall below $4.00/lb or if geopolitical risks materialize.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Southern Copper Corporation's 12-month outlook, with a consensus price target around $168.25 and implied upside of -14.6% versus the current price.
Average Target
$168.25
0 analysts
Implied Upside
-14.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$129 - $250
Analyst target range
Southern Copper is covered by 17 analysts, with a consensus recommendation of 'underperform' and a mean rating of 3.78 (where 1 is strong buy and 5 is sell). The average target price is $168.25, implying a downside of -7.9% from the current price of $182.71. The distribution shows a bearish tilt, with recent actions from major firms like Morgan Stanley (Underweight), UBS (Sell), and JP Morgan (Underweight) reinforcing the cautious stance, while Wells Fargo maintains an Equal Weight rating.
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Bulls vs Bears: SCCO Investment Factors
SCCO presents a compelling growth story with accelerating revenue, exceptional margins, and strong balance sheet, but faces headwinds from a cautious analyst consensus and premium valuation. The bull case is supported by robust fundamentals and copper's structural demand, while the bear case hinges on valuation and geopolitical risks. Currently, the bull case has stronger evidence given the company's operational performance, but the stock's high beta and analyst skepticism warrant caution. The key tension is whether copper prices can sustain their rally to justify the premium valuation, as any significant correction would likely lead to a sharp re-rating.
Bullish
- Revenue Growth Accelerating: Q1 2026 revenue surged 36.18% YoY to $4.25B, up from $3.05B in Q2 2025, showing strong momentum driven by higher copper prices and volumes.
- Exceptional Profitability: Gross margin hit 64.75% in Q1 2026, up from 50.2% a year earlier, while operating margin reached 58.3%, reflecting low-cost operations and operational leverage.
- Strong Balance Sheet: Current ratio of 3.89 and debt-to-equity of 0.67 indicate solid liquidity and manageable leverage, providing financial flexibility for growth projects.
- Copper Demand Tailwinds: Copper is critical for electrification and AI infrastructure, with BHP's earnings surge highlighting copper's structural shift, positioning SCCO to benefit from long-term demand.
Bearish
- Analyst Consensus Underperform: 17 analysts rate SCCO 'underperform' with a mean rating of 3.78 (5=sell), and average target of $168.25 implies -7.9% downside from current $182.71.
- Premium Valuation: Trailing PE of 27.38x and forward PE of 25.32x are above the industry average of 22x, suggesting the market already prices in strong growth.
- High Beta and Volatility: Beta of 1.124 and max drawdown of -30.22% indicate significant price swings, making the stock vulnerable to market downturns and copper price volatility.
- Geopolitical Risks: Operations in Peru and Mexico expose SCCO to political instability, regulatory changes, and community protests, which could disrupt production.
SCCO Technical Analysis
Southern Copper's stock has exhibited a powerful long-term uptrend, with a 1-year price change of +101.34%, significantly outperforming the S&P 500's +18.19% over the same period. Currently trading at $182.71, the stock sits at approximately 82.4% of its 52-week range (low of $87.62, high of $221.67), indicating it remains in the upper half of its yearly range but has pulled back from the highs. This positioning suggests the market still views the stock favorably, though the recent correction from the peak may signal profit-taking or consolidation after a massive rally.
Beta
1.14
1.14x market volatility
Max Drawdown
-30.2%
Largest decline past year
52-Week Range
$90-$222
Price range past year
Annual Return
+116.2%
Cumulative gain past year
| Period | SCCO Return | S&P 500 |
|---|---|---|
| 1m | +13.3% | +2.5% |
| 3m | +10.8% | +5.2% |
| 6m | +0.3% | +11.5% |
| 1y | +116.2% | +22.6% |
| ytd | +35.0% | +12.9% |
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SCCO Fundamental Analysis
Southern Copper's revenue trajectory is robustly accelerating, with Q1 2026 revenue of $4.25 billion, up 36.18% year-over-year, and a clear upward trend from $3.05 billion in Q2 2025 to $3.87 billion in Q4 2025. The company's copper segment drives the majority of revenue at $2.98 billion, complemented by silver ($531.5 million) and molybdenum ($445.5 million), indicating diversified by-product contributions. This growth is fueled by higher copper prices and increased production volumes, positioning the company to benefit from the global electrification and AI infrastructure boom.
Quarterly Revenue
$4.3B
2026-03
Revenue YoY Growth
+36.2%
YoY Comparison
Gross Margin
64.8%
Latest Quarter
Free Cash Flow
$4.3B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is SCCO Overvalued?
Given Southern Copper's strong profitability, the PE ratio is the primary valuation metric. The trailing PE stands at 27.38x, while the forward PE is 25.32x, implying the market expects earnings growth of approximately 8.1% over the next year. The stock trades at a premium to the broader market, with a PEG ratio of 1.12x, suggesting the growth is reasonably priced relative to earnings expansion. Compared to the industry average PE of 22x (based on sector data), SCCO trades at a 24% premium, reflecting its superior margins and growth prospects in the copper market.
PE
27.4x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 12x~27x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include high debt-to-equity of 0.67, which, while manageable, could strain cash flows if copper prices fall. The company's net margin of 32.3% is impressive, but it is highly sensitive to copper price swings; a 10% drop in copper could significantly reduce earnings. Additionally, the payout ratio of 57.3% indicates a commitment to dividends, which may limit reinvestment in growth projects. The company's reliance on copper for the majority of revenue (70% of Q1 2026 revenue) creates concentration risk, as any disruption in copper demand or price would directly impact financial performance.
FAQ
The key risks of holding SCCO include: 1) Copper price volatility, as a 10% drop in copper could significantly reduce earnings; 2) Geopolitical risks in Peru and Mexico, where operations are located, which could disrupt production; 3) Valuation risk, as the stock trades at a premium to peers, leaving little room for error; 4) High beta of 1.124, making the stock sensitive to market downturns. The most severe risk is a combination of falling copper prices and political instability, which could lead to a sharp decline in the stock price.
The 12-month forecast for SCCO is mixed. The bull case, with a 30% probability, targets $200-$250, driven by copper price rallies and strong earnings. The base case, with a 45% probability, targets $160-$190, assuming copper prices stabilize and the stock trades near the analyst average target of $168.25. The bear case, with a 25% probability, targets $128-$160, if copper prices correct or geopolitical risks materialize. The most likely scenario is the base case, with the stock trading in a range, as the market balances strong fundamentals against valuation concerns.
SCCO is overvalued relative to its peers and its own history. The trailing PE of 27.38x and forward PE of 25.32x are above the industry average of 22x, indicating a 24% premium. The PEG ratio of 1.12x suggests the growth is reasonably priced, but the market is paying a premium for SCCO's superior margins and growth prospects. The valuation implies the market expects continued strong earnings growth, which is reflected in the revenue acceleration. However, if copper prices falter, the stock could be vulnerable to a de-rating.
SCCO is a good buy for investors who believe in the long-term copper demand story and can tolerate volatility. The stock has strong fundamentals, with revenue growing 36.18% YoY and gross margins at 64.75%, but it trades at a premium valuation with a forward PE of 25.32x. The average analyst target of $168.25 implies a -7.9% downside, suggesting the stock is currently overvalued. However, if copper prices continue to rise, the stock could outperform. It is not a good buy for risk-averse investors or those seeking immediate upside, but for long-term growth investors, it offers a compelling opportunity.
SCCO is more suitable for long-term investment due to its growth stage and volatility. The stock has a beta of 1.124, indicating higher volatility than the market, and a max drawdown of -30.22%, which can be challenging for short-term traders. The company's earnings visibility is strong, with revenue growth accelerating, but copper prices are cyclical, making short-term predictions difficult. For long-term investors, the stock offers exposure to the copper secular growth story, and a minimum holding period of 3-5 years is recommended to ride out commodity cycles and capture the full growth potential.
