Southern Copper Corporation
SCCO
$195.48
+3.97%
Southern Copper Corporation is an integrated copper producer that operates mining, smelting, and refining facilities primarily in Peru and Mexico, producing copper, molybdenum, zinc, and silver. As one of the world's largest publicly traded copper companies, it benefits from low-cost operations and significant reserves, giving it a competitive edge in the cyclical mining industry. The current investor narrative centers on copper's structural demand growth from electrification and AI infrastructure, but the stock has faced headwinds from geopolitical risks in the Middle East and a recent pullback in copper prices, leading to a cautious near-term outlook.…
SCCO
Southern Copper Corporation
$195.48
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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 $167.71 and implied upside of -14.2% versus the current price.
Average Target
$167.71
0 analysts
Implied Upside
-14.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$129 - $250
Analyst target range
The stock is covered by 17 analysts, with a consensus recommendation of 'underperform' (mean recommendation 3.67 on a 5-point scale where 1 is strong buy and 5 is sell). The average target price is $165.98, implying a downside of -3.8% from the current price of $172.48. The distribution shows 0 buys, 0 holds, and 17 sells/underperforms, indicating a bearish consensus. The target range is wide: low $128.50 (downside -25.5%) to high $250.00 (upside +44.9%). The high target likely assumes a recovery in copper prices and multiple expansion, while the low target prices in margin compression or a prolonged downturn. Recent ratings from major firms (Wells Fargo, Morgan Stanley, UBS, JP Morgan, Scotiabank) are all neutral or bearish, with no upgrades. The wide spread and bearish consensus suggest high uncertainty and a cautious outlook from the analyst community.
Bulls vs Bears: SCCO Investment Factors
Southern Copper presents a classic tension between strong operational performance and cautious market sentiment. The company's 36% revenue growth, 37% net margin, and 39% ROE demonstrate exceptional profitability and financial health, supported by secular copper demand. However, the unanimous analyst underperform rating, elevated PE of 27.4x, and geopolitical risks in Peru and Mexico create significant uncertainty. The single most important factor is copper price direction: if prices sustain or rise, the stock could re-rate higher; if they decline, the high multiple leaves room for substantial downside. Currently, the bearish consensus and technical weakness outweigh the strong fundamentals, making the risk/reward unfavorable near-term.
Bullish
- Strong Revenue Growth: Revenue grew 36.18% YoY to $4.251B in Q1 2026, driven by copper demand from electrification and AI infrastructure. This accelerating trend from $3.122B in Q1 2025 shows robust operational momentum.
- Exceptional Profitability: Net margin expanded to 37.2% in Q1 2026 from 30.3% a year ago, with ROE at 39.27%. This high profitability supports a premium valuation and strong cash generation.
- Healthy Balance Sheet: Debt-to-equity ratio of 0.67 and current ratio of 3.89 indicate low financial risk. Free cash flow TTM of $4.276B provides ample liquidity for dividends and capex.
- Copper Demand Tailwinds: Structural demand from electrification and AI is boosting copper prices. BHP's earnings surge 22% as copper overtakes iron ore signals a secular shift benefiting SCCO.
Bearish
- Bearish Analyst Consensus: All 17 analysts rate the stock as underperform/sell, with an average target of $165.98 implying 3.8% downside. The low target of $128.50 suggests potential 25.5% downside.
- Geopolitical Risk: Operations in Peru and Mexico face political instability. The Iran conflict could disrupt copper supply chains and demand, as noted in recent news about copper-aluminum divergence.
- High Valuation Multiple: Trailing PE of 27.38x is above the historical midpoint of 12.5x-35.3x. Price-to-book of 10.89x is elevated, leaving little margin of safety if earnings disappoint.
- Recent Price Weakness: Stock is down 10% in the last month and 10.35% in three months, trading at 60.5% of its 52-week range. Negative momentum could persist if copper prices falter.
SCCO Technical Analysis
The stock is in a long-term uptrend, with a 1-year price change of +85.44%, significantly outperforming the S&P 500's +18.35%. However, the current price of $172.48 sits at 60.5% of its 52-week range ($85.61 low to $221.67 high), indicating a pullback from the highs. This positioning suggests the stock is in a corrective phase after a strong rally, potentially offering a buying opportunity if the uptrend resumes. The 1-month change of -10.02% and 3-month change of -10.35% show short-term momentum is negative and diverging from the strong 1-year trend. This divergence could signal a temporary pullback or a potential trend reversal, especially as the stock has broken below its 50-day moving average. The RSI is not provided, but the consistent decline from the 52-week high suggests weakening momentum. The 52-week low of $85.61 provides strong support, while the 52-week high of $221.67 is a key resistance level. A breakout above $221.67 would signal a resumption of the uptrend, while a breakdown below $85.61 would be a bearish reversal. The beta of 1.124 indicates the stock is slightly more volatile than the market, meaning it tends to amplify market moves, which is important for risk management.
Beta
1.12
1.12x market volatility
Max Drawdown
-30.2%
Largest decline past year
52-Week Range
$86-$222
Price range past year
Annual Return
+104.6%
Cumulative gain past year
| Period | SCCO Return | S&P 500 |
|---|---|---|
| 1m | +2.9% | +0.4% |
| 3m | +8.3% | +5.5% |
| 6m | +8.0% | +8.4% |
| 1y | +104.6% | +18.9% |
| ytd | +33.9% | +9.6% |
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SCCO Fundamental Analysis
Revenue has been growing strongly, with Q1 2026 revenue of $4.251 billion, up 36.18% year-over-year from $3.122 billion in Q1 2025. The multi-quarter trend shows accelerating growth: Q2 2025 revenue was $3.051 billion, Q3 2025 was $3.377 billion, and Q4 2025 was $3.870 billion. Copper is the primary driver, contributing $2.983 billion (70%) of Q1 2026 revenue, with molybdenum ($445.5 million) and silver ($531.5 million) also significant. The growth trajectory supports the investment case, driven by strong copper demand. The company is highly profitable, with Q1 2026 net income of $1.582 billion and a gross margin of 64.75%. Net margin improved to 37.20% in Q1 2026 from 30.30% in Q1 2025, indicating expanding profitability. Operating margin also rose to 58.34% from 49.18% a year ago, reflecting operational leverage and cost control. The balance sheet is healthy, with a debt-to-equity ratio of 0.67 and a current ratio of 3.89, indicating ample liquidity. Free cash flow (TTM) is $4.276 billion, providing strong internal funding for growth and dividends. The ROE of 39.27% is exceptional, highlighting efficient capital use. The company generates sufficient cash to cover capex and dividends, with a free cash flow yield of approximately 3.6% based on current market cap.
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?
Since net income is positive, the PE ratio is the primary valuation metric. The trailing PE is 27.38x, while the forward PE is 23.97x, indicating the market expects earnings growth. The gap between trailing and forward PE suggests a 14% expected earnings increase, which aligns with the strong revenue growth trajectory. Compared to the industry average (not provided), the stock's PE of 27.38x appears elevated relative to the broader market, but given its high net margin of 32.30% and ROE of 39.27%, a premium may be justified. The PEG ratio of 1.12 suggests the stock is reasonably valued relative to its growth rate. Historically, the trailing PE has ranged from 12.5x (Q4 2021) to 35.3x (Q4 2023). The current 27.38x is above the midpoint of this range, indicating the market is pricing in optimistic expectations. However, given the strong earnings growth, the valuation is not extreme. The price-to-book ratio of 10.89x is also high, reflecting the company's high ROE and intangible assets.
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 & Operational Risks: The company's high net margin of 37.2% is sensitive to copper price fluctuations, as copper contributes 70% of revenue. A 10% drop in copper prices could reduce earnings by roughly 20% given operating leverage. The debt-to-equity ratio of 0.67 is manageable, but interest expense of $89.8M in Q1 2026 is not negligible. Free cash flow of $4.276B provides a cushion, but the payout ratio of 57.3% limits dividend growth flexibility. Revenue concentration in copper is a key risk, as any demand slowdown from a global recession would directly impact top line.
Market & Competitive Risks: The stock's beta of 1.124 indicates higher volatility than the market, amplifying downside in sell-offs. The trailing PE of 27.4x is above the 5-year average of ~20x, making it vulnerable to multiple compression if growth decelerates. The analyst consensus is unanimously bearish, with an average target 3.8% below current price, reflecting skepticism about valuation. Geopolitical risks in Peru and Mexico, including potential mining taxes or nationalization, could disrupt operations. Recent news highlights the Iran conflict's impact on copper demand, adding macro uncertainty.
Worst-Case Scenario: A prolonged copper price downturn combined with operational disruptions in Peru or Mexico could trigger earnings declines. If copper prices fall 20% and margins compress, earnings could drop 30-40%, pushing the stock to the analyst low target of $128.50. This represents a 25.5% downside from the current price of $172.48. The 52-week low of $85.61 is an extreme scenario requiring a severe recession, implying a 50% loss. The maximum drawdown of 30.22% in the past suggests a realistic worst-case loss of about 30%.