Southern Copper Corporation
SCCO
$200.57
-1.81%
Southern Copper Corporation is a vertically integrated producer of copper and associated by-products — molybdenum, silver, zinc, lead and gold — operating mining, smelting and refining assets across Peru and Mexico, with sales spanning the Americas, Europe and Asia. As one of the world's largest listed copper miners by reserves and market capitalization, SCCO is a pure-play leveraged proxy on the copper price, distinguished by some of the industry's lowest cash costs and the largest copper reserve base among publicly traded peers. The current investor narrative is dominated by the structural electrification and AI-datacenter demand thesis for copper, which has driven a powerful re-rating in the shares, while simultaneously being challenged by a bearish sell-side consensus that argues the stock's premium multiple already discounts years of favorable copper prices. Recent headlines have added a geopolitical overlay — Middle East conflict creating a two-track metals market with copper at risk of a demand-destruction surplus, offset by ceasefire hopes that could spark a snapback rally in war-battered miners. Management's execution on volume growth and margin expansion, with Q2 2026 revenue up over 40% year-over-year, is the fundamental counterweight to valuation concerns.…
SCCO
Southern Copper Corporation
$200.57
Related headlines
SCCO 12-Month Price Forecast
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 $174.13 and implied upside of -13.2% versus the current price.
Average Target
$174.13
0 analysts
Implied Upside
-13.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$138 - $275
Analyst target range
Coverage of Southern Copper is substantial with 17 analysts, but the consensus is decidedly bearish: the recommendation is "underperform" with a recommendation mean of 3.78 (where 1 is Strong Buy and 5 is Strong Sell), and the average price target of $171.44 implies approximately 16.6% downside from the current price of $205.54. This is a rare and notable divergence — a stock up 70.5% over one year with a sell-side consensus that is both underperform-rated and below the current trading price. The distribution of recent institutional ratings is overwhelmingly negative: Barclays maintains Underweight (July 2026), Morgan Stanley Underweight (July 2026), UBS Sell (June 2026), JP Morgan Underweight (June 2026), and Scotiabank Sector Underweight (June 2026), with only Wells Fargo at Equal Weight providing any neutral counterbalance. The consensus is unambiguously bearish, and the fact that the stock has rallied despite this suggests either that the market is pricing in a copper supercycle that analysts are unwilling to underwrite, or that momentum and retail flows are driving the price independently of fundamental research. The target price range is extremely wide, from a low of $138.34 to a high of $275.00 — a spread of over 98% relative to the low target, signaling very high uncertainty about the copper price outlook and SCCO's earnings power. The high target of $275.00 implies roughly 33.8% upside and would require a sustained copper price above $5.50/lb, continued volume growth from the Peruvian and Mexican operations, and multiple expansion toward 30x forward earnings — essentially a full-throated copper supercycle scenario. The low target of $138.34 implies 32.7% downside and prices in a copper price correction, margin compression from cost inflation, and a de-rating toward the lower end of the historical PE band (approximately 15x–18x). The wide dispersion, combined with the uniformly negative ratings and the stock's strong price momentum, creates a classic battleground setup: either the analysts are wrong and will be forced to upgrade into a copper bull market, or the stock is overextended and due for a sharp correction toward consensus. Investors should note that the estimated EPS range of $7.88–$9.66 for the forward period brackets the consensus average of $8.79, and the estimated revenue range of $17.0B–$19.9B reflects similar uncertainty about copper pricing and volumes.
Bulls vs Bears: SCCO Investment Factors
The bull case rests on SCCO's exceptional fundamental performance—40.6% revenue growth, 62% gross margins, and robust cash flow—which validates the copper supercycle narrative. However, the bear case is equally compelling: a 27x PE premium, unanimous analyst underperformance ratings, and a forward PE above trailing PE suggest the market has already priced in years of favorable conditions. The most critical tension is whether copper prices can sustain above $5.50/lb to justify the valuation, or if mean-reversion will trigger a de-rating. Currently, the bear evidence appears stronger due to the extreme valuation disconnect and negative analyst sentiment, but the bull case could prevail if copper demand surprises to the upside.
Bullish
- Explosive revenue growth: Q2 2026 revenue surged 40.6% YoY to $4.289 billion, driven by higher copper prices and operational leverage. This growth rate is exceptional for a large-cap miner and validates the electrification demand thesis.
- Elite profitability and margins: Q2 2026 net margin reached 38.9% and gross margin 62.0%, up from 31.9% and 53.1% respectively a year earlier. EBITDA margin expanded to 66.4%, demonstrating strong operating leverage.
- Robust balance sheet and cash flow: Debt-to-equity is conservative at 0.672, current ratio is 3.89, and TTM free cash flow is $5.965 billion. Q2 2026 free cash flow of $2.430 billion comfortably covers the $826.2 million dividend, with a 2.09% yield.
- Strong momentum and relative strength: The stock is up 70.5% over the past year and 42.5% YTD, significantly outperforming the S&P 500's 15.0% and 12.9% gains. It trades at 85.6% of its 52-week range, with the high just 7.4% above the current price.
Bearish
- Premium valuation vs. peers: SCCO trades at 27.1x trailing PE and 15.2x EV/EBITDA, representing a 50-125% premium to typical large-cap miners (12-18x PE, 6-10x EV/EBITDA). This leaves little room for disappointment.
- Bearish analyst consensus: All 17 analysts rate the stock 'underperform' with a mean of 3.78, and the average target of $171.44 implies 16.6% downside from the current price of $205.54. This rare divergence signals skepticism.
- Forward PE above trailing PE: Forward PE of 28.25x exceeds trailing PE of 27.06x, implying the market expects earnings to decline modestly. Consensus EPS of $8.79 suggests normalization from current run-rate.
- Commodity price dependency: Copper contributes 72.7% of segment revenue, making SCCO highly levered to copper prices. A demand-destruction surplus from Middle East conflict could reverse the 40.6% revenue growth.
SCCO Technical Analysis
Southern Copper is in a sustained, powerful uptrend, with the shares up 70.5% over the trailing twelve months and 42.5% year-to-date, dramatically outpacing the S&P 500's 15.0% and 12.9% respective gains. At a current price of $205.54, the stock is trading at approximately 85.6% of its 52-week range (low of $115.74, high of $220.78), positioning it in the upper quartile of its annual band — a zone that historically signals strong momentum but also elevated vulnerability to profit-taking. The 52-week high of $220.78 sits just 7.4% above the current price, meaning the stock is within striking distance of new highs, which would confirm trend continuation rather than exhaustion. Recent momentum remains constructive but has decelerated: the 1-month change of +0.63% is a sharp slowdown from the 3-month gain of +20.9% and the 6-month gain of +18.1%, suggesting the August surge (when the stock jumped from ~$198 to $216 in a single week) has given way to a consolidation phase. Notably, the 1-month relative strength versus SPY is a mere +3.7%, versus +17.6% over three months and +55.5% over one year, indicating the stock's alpha generation has compressed markedly in the near term — a classic deceleration pattern that often precedes either a healthy base-building pause or a deeper mean-reversion pullback. The 8.79 short ratio (days-to-cover) implies a meaningful short base that could fuel squeezes on upside breakouts, though it also reflects genuine institutional skepticism. Key technical support rests at the 52-week low of $115.74, with a more immediate psychological floor near the $190–$195 zone where the stock consolidated in September; resistance is defined by the 52-week high of $220.78. A decisive breakout above $220.78 on volume would signal a fresh leg higher and likely force short covering, while a breakdown below $190 would open the door toward the $170–$175 area (the June–July consolidation range) and potentially the 200-day moving average. With a beta of 1.151, SCCO is roughly 15% more volatile than the broader market, meaning position sizing should account for amplified drawdowns — the stock's maximum drawdown of -30.2% over the past year underscores that this is not a low-volatility holding.
Beta
1.13
1.13x market volatility
Max Drawdown
-30.2%
Largest decline past year
52-Week Range
$116-$221
Price range past year
Annual Return
+64.5%
Cumulative gain past year
| Period | SCCO Return | S&P 500 |
|---|---|---|
| 1m | +0.9% | +0.9% |
| 3m | +16.4% | +3.4% |
| 6m | +6.5% | +14.4% |
| 1y | +64.5% | +16.2% |
| ytd | +39.0% | +14.0% |
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SCCO Fundamental Analysis
Southern Copper's revenue trajectory is accelerating sharply: Q2 2026 revenue of $4.289 billion grew 40.6% year-over-year versus Q2 2025's $3.051 billion, capping a multi-quarter sequence of $3.378B (Q3 2025), $3.870B (Q4 2025), $4.251B (Q1 2026) and $4.289B (Q2 2026). The sequential progression shows growth moderating from the explosive Q4-to-Q1 jump but still expanding, with copper contributing $3.117 billion (approximately 72.7% of segment revenue), followed by molybdenum at $475.8 million, silver at $375.8 million, zinc at $152.2 million and other at $168.3 million. The copper-centric revenue mix means SCCO's top line is highly levered to the red metal's price and volume, and the 40.6% YoY growth reflects both favorable pricing and operational leverage. For the investment case, this growth rate is exceptional for a large-cap miner and validates the electrification demand thesis, though investors must recognize that commodity price mean-reversion could reverse this trajectory quickly. Profitability is elite: Q2 2026 net income of $1.670 billion on $4.289 billion revenue implies a 38.9% net margin, while gross margin reached 61.98% and operating margin 61.16% — levels that rank among the highest in the global mining industry. The margin trend is clearly expanding: gross margin rose from 53.1% in Q2 2025 to 62.0% in Q2 2026, and net margin improved from 31.9% to 38.9% over the same period, driven by operating leverage on higher copper prices and disciplined cost control (SG&A of just $35.3 million, or 0.8% of revenue). EBITDA of $2.849 billion in Q2 2026 represents a 66.4% EBITDA margin, up from 60.4% a year earlier, demonstrating that incremental revenue is dropping through to the bottom line at very high rates. The balance sheet and cash flow profile are robust: debt-to-equity of 0.672 is conservative for a capital-intensive miner, the current ratio of 3.89 signals ample liquidity, and ROE of 39.3% and ROA of 25.7% are exceptional returns on capital. Free cash flow on a trailing-twelve-month basis is $5.965 billion, and Q2 2026 free cash flow of $2.430 billion comfortably covers the $826.2 million in dividends paid during the quarter, with a payout ratio of 57.3%. Operating cash flow of $1.989 billion in Q2 2026 versus capital expenditure of $441.9 million shows the company is self-funding its growth investments while returning substantial cash to shareholders — a dividend yield of 2.09% — and the $5.665 billion cash balance provides a significant buffer against commodity downturns.
Quarterly Revenue
$4.3B
2026-06
Revenue YoY Growth
+40.6%
YoY Comparison
Gross Margin
62.0%
Latest Quarter
Free Cash Flow
$6.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is SCCO Overvalued?
Because Southern Copper is solidly profitable — Q2 2026 net income of $1.670 billion and trailing EPS positive — the PE ratio is the appropriate primary valuation metric. The stock trades at a trailing PE of 27.06x and a forward PE of 28.25x, an unusual configuration where the forward multiple exceeds the trailing multiple, implying the market expects earnings to decline modestly over the next twelve months (consistent with consensus EPS estimates of $8.79 against a trailing run-rate that annualizes above $8.00 but faces commodity normalization). The PEG ratio of 1.106 suggests the valuation is roughly in line with growth expectations, though the forward PE above the trailing PE is a cautionary signal that the market is not pricing in earnings acceleration. On a price-to-sales basis, SCCO trades at 8.85x, and on EV/EBITDA at 15.2x — both rich absolute multiples for a commodity producer. Compared to the broader Basic Materials sector, where large-cap miners typically trade at PE multiples of 12x–18x and EV/EBITDA of 6x–10x, SCCO's 27.1x trailing PE represents a premium of roughly 50–125% depending on the peer set, and its 15.2x EV/EBITDA is approximately 50–150% above typical sector levels. This premium is partially justified by SCCO's industry-leading 62.0% gross margin, 38.9% net margin and 39.3% ROE — metrics that are two to three times the sector median — but the magnitude of the premium leaves little room for disappointment. The price-to-book ratio of 10.77x is extraordinarily elevated for a mining company, where book value is typically a more meaningful anchor; this reflects both the market's premium for SCCO's reserve quality and the cumulative effect of the stock's re-rating. Historically, SCCO's PE has ranged from roughly 11.8x (Q3 2021) to 34.9x (Q4 2023), with the current 27.1x sitting in the upper third of that band — closer to the high end than the low. The PS ratio of 8.85x compares to a historical range of approximately 15.2x–33.7x on the quarterly data series, but this comparison is distorted by the different share count and revenue base in earlier periods; on a normalized basis, the current PS is at the lower end of its multi-year range, which creates a conflicting signal versus the PE analysis. The PB ratio of 10.77x is near the top of its historical band (which ranged from 4.3x in 2022 to 11.9x in Q1 2026), suggesting the market is pricing in optimistic expectations for reserve value and future profitability. Net-net, the valuation embeds a premium that requires sustained high copper prices and continued margin expansion to justify.
PE
27.1x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 12x~26x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant given SCCO's commodity dependence. Copper accounts for 72.7% of revenue, so a 10% drop in copper prices could reduce annual revenue by roughly $1.2 billion based on Q2 2026 run-rate. The company's debt-to-equity of 0.672 is manageable, but interest expense of $88 million in Q2 2026 consumes a portion of operating income. Margins, while currently elite at 62% gross, are vulnerable to cost inflation and grade declines; any compression could rapidly erode profitability given the high fixed-cost nature of mining.
Market and competitive risks stem from SCCO's premium valuation and cyclical sector exposure. Trading at 27.1x trailing PE and 15.2x EV/EBITDA, the stock is priced for perfection, leaving it susceptible to multiple compression if copper prices falter or if analysts' bearish targets gain traction. The beta of 1.151 means SCCO is 15% more volatile than the market, amplifying drawdowns during sector rotations. Geopolitical tensions, such as the Middle East conflict, could disrupt copper demand or supply chains, while a ceasefire might trigger a snapback rally but also reduce the risk premium currently embedded in prices.
The worst-case scenario involves a sharp copper price correction due to global demand destruction, leading to earnings misses and a de-rating toward historical low multiples. If copper falls below $4.00/lb, SCCO's revenue could decline 20-30%, compressing net margins to 20% and EPS to $6.00. The stock could then retest its 52-week low of $115.74, representing a 43.7% downside from the current price of $205.54. The analyst low target of $138.34 implies a 32.7% decline, and with a max drawdown of -30.2% in the past year, such a scenario is plausible in a commodity downturn.