SCCO

Based on a comprehensive review, SCCO presents a compelling but nuanced investment case.

Technical & Fundamental Outlook: Technically, SCCO is exhibiting remarkable bullish momentum, significantly outperforming the market and trading near its 52-week high. Fundamentally, the company is exceptionally strong, with robust revenue growth, expanding profit margins of nearly 33%, and a very healthy balance sheet. This powerful combination of price action and financial health suggests strong institutional confidence.

Valuation & Risk Considerations: The primary concern is valuation. SCCO appears richly priced with high PE, PB, and EV/EBITDA ratios, indicating that much of its near-term growth may already be factored into the stock price. Investors must also be mindful of its inherent exposure to copper price volatility and geopolitical risks in its operating regions.

Recommendation: SCCO is a high-quality company on a powerful uptrend, making it a candidate for investment. However, its premium valuation demands caution. A strategic approach would be to consider buying on any meaningful price pullbacks, which would offer a better margin of safety. This allows participation in its strong operational story while mitigating valuation risk.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, here is a 12-month outlook for SCCO (Southern Copper Corp):

12-Month Outlook for SCCO

The outlook for SCCO over the next year is positive, driven by the strong fundamental backdrop for copper, but tempered by its premium valuation. Key catalysts will be sustained high copper prices fueled by global electrification trends and supply constraints, which should continue to support its robust revenue and margins. The primary risk is a significant correction in copper prices or a broader market downturn that could disproportionately impact the stock given its rich valuation multiples. While a specific analyst target is unavailable, the stock's performance is likely to be volatile but generally upward-trending, with significant pullbacks offering more attractive entry points than chasing the current highs.

Wall Street Consensus

Most Wall Street analysts are optimistic about SCCO's 12-month outlook, with consensus target around $180.26, indicating expected upside potential.

Overall, SCCO has investment potential but also faces challenges. Here are key factors to weigh before investing.

SCCO has exhibited exceptionally strong performance over the past three months, significantly outperforming the broader market with impressive double-digit gains. The stock is currently trading very close to its 52-week high, reflecting sustained bullish momentum over the intermediate term. Recent performance shows extraordinary strength, with SCCO surging 18.11% over the past month alone following a substantial 34.68% gain over three months, dramatically outpacing the market by over 31 percentage points during this period. This accelerated upward momentum, combined with a beta slightly above 1, indicates the stock has delivered superior returns with only marginally higher volatility than the market.

Currently trading at $174.37, SCCO sits just 1.7% below its 52-week high of $177.39, having recovered strongly from its 52-week low of $72.747 and demonstrating a remarkable 140% increase from that trough. While the minimal distance from the yearly peak suggests the stock is in overbought territory, the consistent upward trajectory and massive outperformance relative to the market indicate sustained institutional confidence. The 25.47% maximum drawdown over the past year appears modest given the stock's extraordinary recovery and current proximity to record highs, though caution is warranted given the extended valuation.

Revenue & Profitability SCCO demonstrated solid revenue growth, increasing from $3.05 billion in Q2 to $3.38 billion in Q3 2025. Profitability improved substantially with net income rising from $974 million to $1.11 billion quarter-over-quarter, while the net profit margin expanded to 32.8%. The company maintains strong operational leverage with an operating income ratio exceeding 52%.

Financial Health The company exhibits exceptional liquidity with a current ratio of 4.52 and maintains a conservative debt profile with a debt-to-equity ratio of 0.71. Strong interest coverage of 19.4x indicates comfortable debt servicing capacity, though the cash flow to debt ratio of 0.21 suggests moderate free cash flow generation relative to outstanding obligations.

Operational Efficiency SCCO delivers solid returns with ROE of 10.6% and ROCE of 9.5%, though asset turnover remains low at 0.17. The cash conversion cycle of 67 days reflects efficient working capital management, while the operating cash flow to sales ratio of 46.2% indicates strong cash generation from core operations.

SCCO Valuation Analysis

Valuation Level: SCCO appears richly valued based on its current metrics. It trades at a trailing PE of 36.62 and a forward PE of 22.53, which are elevated, especially considering its high PEG ratio of 1.68, suggesting its earnings growth does not fully justify its price. Furthermore, its exceptionally high Price-to-Book (PB) ratio of 13.71 and Price-to-Sales (PS) ratio of 11.55, combined with a very high EV/EBITDA of 51.06, collectively signal significant overvaluation relative to its fundamental earnings and asset base.

Peer Comparison: A conclusive peer comparison cannot be performed as the specific industry average data is unavailable. However, the company's high multiples across the board (PE, PB, PS, EV/EBITDA) would typically be difficult to sustain unless it operates in a niche or high-growth sector. To properly assess its relative value, a comparison with the average valuation ratios of its direct industry competitors is essential.

SCCO demonstrates moderate volatility risk, with a beta of 1.065 indicating its price movements are generally in line with the broader market but slightly more amplified. The significant maximum drawdown of -25.47% over the past year highlights the substantial loss an investor could have experienced during market downturns, underscoring the stock's exposure to cyclical swings in commodity prices, particularly copper.

The absence of notable short interest suggests that the market does not currently harbor a strong pessimistic view on the stock's immediate prospects. However, as a company heavily reliant on copper mining, SCCO faces inherent operational and geopolitical risks, including potential labor disputes, regulatory changes in key operating regions like Peru and Mexico, and fluctuations in global copper demand that can impact revenue regardless of its trading liquidity.