Southern Copper Corporation
SCCO
$177.83
-0.07%
Southern Copper Corporation is an integrated producer of copper and other minerals, operating mining, smelting, and refining facilities primarily in Peru and Mexico. It is a major player in the copper industry, leveraging its integrated operations and significant mineral reserves as core advantages.…
SCCO
Southern Copper Corporation
$177.83
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Investment Opinion: Should I buy SCCO Today?
Based on a synthesis of the available data, SCCO presents a Hold rating for most investors. The company's exceptional fundamentals and positive long-term demand outlook for copper are compelling. However, these strengths are counterbalanced by a premium valuation and high sensitivity to commodity price cycles. The recent sharp correction suggests the market is already pricing in some of these risks, but the stock may remain volatile. Investors with a high risk tolerance and a bullish long-term view on copper may find value on further weakness.
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SCCO 12-Month Price Forecast
The analysis yields a neutral stance due to the tension between SCCO's outstanding fundamental strength and its elevated, cyclical-risk-laden valuation. Confidence is medium as the lack of clear analyst targets and the stock's high beta (1.08) introduce significant uncertainty around near-term price direction.
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 $231.18 and implied upside of +30.0% versus the current price.
Average Target
$231.18
3 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
3
covering this stock
Price Range
$142 - $231
Analyst target range
No sufficient analyst coverage available. While there are recent institutional rating actions from firms like UBS (Sell) and B of A Securities (Underperform), the provided analyst data lacks consensus target prices or a meaningful ratings distribution, with only three analysts tracked and no EPS estimates provided.
Bulls vs Bears: SCCO Investment Factors
Southern Copper is a fundamentally strong company with exceptional profitability, benefiting from secular copper demand trends. However, its stock carries significant valuation and cyclical risks, evidenced by its premium multiples and recent sharp pullback from highs. The investment thesis hinges on the sustainability of high copper prices.
Bullish
- Strong Copper Demand Outlook: Structural demand from AI, electrification, and potential geopolitical catalysts supports long-term copper prices.
- Exceptional Profitability Margins: Net margin of 32.3% and ROE of 39.3% demonstrate superior operational efficiency and pricing power.
- Robust Financial Health: Strong current ratio of 3.89 and manageable D/E of 0.67 provide financial flexibility.
- Significant Revenue Growth: Q4 revenue grew 39% YoY, indicating strong operational performance amid favorable commodity prices.
Bearish
- Elevated Valuation Multiples: Trailing P/E of 27.7, P/S of 9.0, and P/B of 10.9 suggest the stock is richly priced.
- High Commodity Price Sensitivity: Earnings are directly tied to volatile copper prices, creating significant cyclical risk.
- Recent Sharp Price Correction: Stock is down 21% in one month and 23% from its 52-week high, showing high volatility.
- Limited Analyst Support: Sparse analyst coverage with recent institutional ratings being Sell and Underperform.
SCCO Technical Analysis
Overall Assessment: The stock has exhibited strong long-term momentum, with a 91.01% gain over the past year and a 39.64% increase over the last six months, significantly outperforming the broader market. However, the trend has recently reversed, showing high volatility and a sharp pullback from its 52-week high.
Short-term Performance: Over the past month, the stock has declined sharply by 21.18%, underperforming the S&P 500 by 15.93 percentage points. In contrast, the 3-month performance remains positive with a 20.95% gain, outperforming the market by 25.58 percentage points, indicating a recent but significant correction within a longer-term uptrend.
Current Position: The current price of $172.06 sits approximately 23.2% below its 52-week high of $223.89 and about 138% above its 52-week low of $72.28. This places the stock in the upper half of its yearly range but well off recent peaks, having experienced a maximum drawdown of -30.22% from its high.
Beta
1.08
1.08x market volatility
Max Drawdown
-30.2%
Largest decline past year
52-Week Range
$72-$224
Price range past year
Annual Return
+95.5%
Cumulative gain past year
| Period | SCCO Return | S&P 500 |
|---|---|---|
| 1m | -13.8% | -3.6% |
| 3m | +20.6% | -4.0% |
| 6m | +41.0% | -2.0% |
| 1y | +95.5% | +16.2% |
| ytd | +20.6% | -3.8% |
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SCCO Fundamental Analysis
Revenue & Profitability: The company's Q4 2025 revenue of $3.87 billion grew 38.99% year-over-year. Profitability is robust, with a net margin of 32.30%, a gross margin of 56.67%, and an operating margin of 52.17% as per valuation data, indicating strong operational efficiency and pricing power.
Financial Health: The balance sheet appears solid with a current ratio of 3.89, suggesting ample short-term liquidity. The debt-to-equity ratio is moderate at 0.67, reflecting a manageable capital structure. Free cash flow over the trailing twelve months is a healthy $3.43 billion.
Operational Efficiency: The company demonstrates high returns, with a Return on Equity (ROE) of 39.27% and a Return on Assets (ROA) of 21.83%. These figures indicate highly effective use of shareholder capital and corporate assets to generate profits.
Quarterly Revenue
$3.9B
2025-12
Revenue YoY Growth
+0.38%
YoY Comparison
Gross Margin
+0.61%
Latest Quarter
Free Cash Flow
$3.4B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is SCCO Overvalued?
Valuation Level: Given the company's positive net income, the trailing P/E ratio of 27.74 is the primary valuation metric. This suggests the market is pricing in strong future earnings growth, which is supported by a forward P/E of 30.30 and a PEG ratio of 1.13, indicating the stock is trading at a premium relative to its growth rate.
Peer Comparison: Data not available for direct industry average comparisons. However, the valuation appears elevated based on absolute multiples like the Price/Sales ratio of 8.96 and the Price/Book ratio of 10.89, which are typically high for a materials company, reflecting its premium profitability and growth profile.
PE
27.7x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 12x~36x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.4x
Enterprise Value Multiple
Investment Risk Disclosure
The primary risk for SCCO is its direct exposure to volatile copper prices. As a pure-play copper miner, its revenue and profitability are highly cyclical and dependent on global economic growth, particularly in construction and manufacturing. The recent 21% monthly decline highlights this commodity-driven volatility.
Operational and geopolitical risks are also material. The company's primary assets are in Peru and Mexico, exposing it to potential political instability, regulatory changes, and operational disruptions. The high valuation multiples (P/E ~28, P/B ~11) present a significant risk if earnings growth fails to meet elevated expectations or if copper prices retreat.
Financial risks appear moderate given the strong liquidity (current ratio 3.9) and manageable debt (D/E 0.67). However, the high short ratio of 6.58 indicates substantial bearish sentiment in the market, which could exacerbate downward price movements during negative news flow.