Morgan Stanley downgrades Southern Copper, says valuation unwarranted

Morgan Stanley downgraded Southern Copper (SCCO) to Underweight from Equal Weight with a price target of $138, up from $130. The firm sees more value in aluminum than copper, and with less crowded positioning, it prefers Alcoa (AA) to most copper equities. The downgrade is predicated on what the firm views as unwarranted valuation and downside to its new price target, the analyst tells investors in a research note. While Southern Copper has been one of the few pure-play copper names to avoid operational issues in the past, the firm believes this is more than fully reflected in the current share price.