Southern Copper Corporation
SCCO
$216.00
+8.69%
Southern Copper Corporation is an integrated copper producer that operates mining, smelting, and refining facilities primarily in Peru and Mexico, with a product portfolio including copper, molybdenum, zinc, silver, and gold. As one of the world's largest publicly traded copper mining companies, it holds a competitive edge through its low-cost operations and significant reserve base, making it a key player in the global copper supply chain. The current investor narrative centers on the surging demand for copper driven by electrification, AI infrastructure, and renewable energy, which has propelled the stock to record highs, while also drawing attention to geopolitical risks and the company's ability to capitalize on structural supply deficits. Recent news highlights copper's outperformance relative to other metals, with Southern Copper positioned as a prime beneficiary of the commodity's bullish outlook.…
SCCO
Southern Copper Corporation
$216.00
Related headlines
Investment Opinion: Should I buy SCCO Today?
Rating: Hold. The stock is a high-quality copper producer with exceptional growth, but the current price already reflects much of the optimism. Analyst consensus is 'underperform' with an average target of $166.77, implying -22.8% downside. The thesis is that while fundamentals are strong, valuation is stretched, and the risk/reward is unfavorable at current levels.
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SCCO 12-Month Price Forecast
The AI assessment is neutral with medium confidence. While SCCO's fundamental growth is impressive, the valuation is stretched, and analyst sentiment is bearish. The stock's momentum could continue if copper prices rally, but the risk of a correction is high given the premium valuation. Key factors to watch are copper price trends and Q2 earnings. If copper prices sustain above $5/lb and revenue growth exceeds 30%, the stance would upgrade to bullish. Conversely, a drop in copper prices below $4/lb or a significant earnings miss would downgrade to bearish.
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 $166.77 and implied upside of -22.8% versus the current price.
Average Target
$166.77
0 analysts
Implied Upside
-22.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$127 - $247
Analyst target range
Southern Copper is covered by 17 analysts, with a consensus recommendation of 'underperform' and a mean recommendation score of 3.78 (where 1 is strong buy and 5 is sell). The average target price is $166.77, implying a downside of -22.8% from the current price of $216, indicating a bearish sentiment among analysts despite the stock's strong momentum. The target range spans from a low of $126.98 to a high of $247.04, with the high target suggesting potential upside of +14.4% if copper prices continue to rally, while the low target reflects concerns about a possible correction or demand destruction. Recent institutional ratings show a consistent bearish stance, with firms like Morgan Stanley and JP Morgan maintaining underweight ratings, and UBS reiterating a sell, while Wells Fargo holds an equal weight, suggesting that the sell-side sees limited upside at current levels.
Bulls vs Bears: SCCO Investment Factors
Southern Copper presents a classic growth-vs-valuation tension. On the bull side, explosive revenue growth (36.2% YoY), expanding margins (gross margin 64.75%), and a strong balance sheet (current ratio 3.89) underscore operational excellence and structural copper demand. On the bear side, the stock trades at a 23% premium to peers, analysts see 22.8% downside, and forward P/E suggests earnings deceleration. The most critical tension is whether copper prices can sustain current levels to justify the premium valuation; if copper continues to rally on electrification and AI demand, the stock could push higher, but any demand destruction or geopolitical shock could trigger a sharp correction. Currently, the bear case has stronger evidence given analyst sentiment and valuation concerns, but the momentum and fundamental strength keep the bull case alive.
Bullish
- Explosive Revenue Growth: Q1 2026 revenue surged 36.2% YoY to $4.25B, with sequential acceleration from $3.05B in Q2 2025 to $4.25B in Q1 2026. This growth is driven by higher copper prices and robust demand from electrification and AI infrastructure.
- Superior Profitability Metrics: Gross margin expanded to 64.75% in Q1 2026, up from 50.2% in Q1 2025, while operating margin reached 58.3%. Net margin of 37.2% is well above industry averages, reflecting low-cost operations and operational leverage.
- Strong Balance Sheet: Current ratio of 3.89 indicates ample liquidity, and debt-to-equity of 0.67 is manageable. Free cash flow TTM of $4.28B provides flexibility for dividends and growth investments.
- Structural Copper Demand: Copper is critical for electrification, renewable energy, and AI data centers. BHP's earnings surge 22% as copper overtakes iron ore highlights the sector's structural shift, positioning SCCO as a key beneficiary.
Bearish
- Analyst Consensus is Underperform: 17 analysts rate SCCO 'underperform' with a mean score of 3.78 (5=sell). Average target price of $166.77 implies -22.8% downside from current $216, signaling sell-side sees limited upside.
- Rich Valuation vs Peers: Trailing P/E of 27.06x is 23% above the industry average of 22x. Forward P/E of 30.26x is even higher, suggesting the market expects earnings growth to slow, yet still pays a premium.
- Earnings Growth Deceleration Expected: Forward P/E (30.26x) exceeds trailing P/E (27.06x), implying analysts expect lower future earnings. This is unusual given strong copper prices and may signal concerns about cost inflation or demand.
- Geopolitical and Operational Risks: Operations concentrated in Peru and Mexico expose SCCO to political instability, community protests, and regulatory changes. Recent news on Iran conflict could disrupt global copper supply chains, but also demand.
SCCO Technical Analysis
Southern Copper's stock is in a powerful sustained uptrend, with a 1-year price change of +139.57% and a year-to-date gain of +49.74%. The current price of $216 sits just 1.4% below the 52-week high of $219.04, and 141.3% above the 52-week low of $89.50, indicating the stock is trading near the top of its range, reflecting strong momentum and investor optimism. This positioning near highs suggests the market is pricing in continued strength, though it also raises the risk of overextension and potential profit-taking.
Beta
1.14
1.14x market volatility
Max Drawdown
-30.2%
Largest decline past year
52-Week Range
$90-$219
Price range past year
Annual Return
+139.6%
Cumulative gain past year
| Period | SCCO Return | S&P 500 |
|---|---|---|
| 1m | +11.8% | +3.6% |
| 3m | +21.7% | +2.7% |
| 6m | +9.8% | +11.4% |
| 1y | +139.6% | +18.7% |
| ytd | +49.7% | +12.3% |
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SCCO Fundamental Analysis
Southern Copper's revenue trajectory is accelerating sharply, with Q1 2026 revenue of $4.25 billion, up 36.2% year-over-year, and a sequential increase from $3.87 billion in Q4 2025. The multi-quarter trend shows robust growth, with revenue rising from $3.05 billion in Q2 2025 to $3.38 billion in Q3 2025 and $3.87 billion in Q4 2025, driven by higher copper prices and strong demand. Copper remains the primary revenue driver at $2.98 billion, followed by silver at $531.5 million and molybdenum at $445.5 million, with all segments contributing to the top-line expansion.
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 positive net income, the trailing P/E ratio of 27.06x is the primary valuation metric, with a forward P/E of 30.26x, indicating that the market expects earnings to grow slightly slower than the current multiple suggests. The gap between trailing and forward P/E implies a modest deceleration in earnings growth, which is unusual given the strong copper price environment. Compared to the industry average P/E of 22x, Southern Copper trades at a 23% premium, reflecting its superior profitability and growth prospects, though the premium may be justified by its low-cost position and strong balance sheet.
PE
27.1x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 12x~27x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks: SCCO's debt-to-equity of 0.67 is moderate, but interest expense of $89.8M in Q1 2026 is manageable. However, the company's reliance on copper for ~70% of revenue (Q1 copper revenue $2.98B out of $4.25B total) creates concentration risk; a 10% drop in copper prices could significantly impact earnings. Free cash flow of $4.28B TTM is strong, but capital expenditure needs for mine development could strain cash flows if copper prices fall. The payout ratio of 57.3% indicates a commitment to dividends, which could be at risk if earnings decline.