Southern Copper (SCCO) AI Stock Analysis

• Market Cap: $136.56B
• Dividend Yield: 2.07%
• Average Volume (3M): 1.92M
• Price to Earnings (P/E): 27.7
• Beta (1Y): 1.37
• Revenue Growth: 12.70%
• EPS Growth: 25.51%
• Country: US
• Employees: 16,133
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Copper
• EPS (TTM): 1.55
• Shares Outstanding: 819,103,100
• 10 Day Avg. Volume: 1,904,124
• 30 Day Avg. Volume: 1,919,530
• PEG Ratio: 1.13
• Price to Book (P/B): 10.89
• Price to Sales (P/S): 8.96
• P/FCF Ratio: 35.09
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 10.49
• Enterprise Value/Gross Profit: 18.51
• Enterprise Value/Ebitda: 17.58
• 1Y Price Target: $147.69
• Price Target Upside: -11.41% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 10
• EPS Forecast (FY): 6.92
• Revenue Forecast (FY): $15.45B

• Rating: 68 Neutral
• Price Target: $193.00 ▲(15.76% Upside)
• Action: Downgraded Date: 02/28/26
• Date: Action: Downgraded 02/28/26

The score is held back primarily by weak TTM cash generation (near-zero operating cash flow and negative free cash flow), despite excellent profitability and improving leverage. Strong technical momentum supports the rating, while valuation is a notable headwind given the high P/E. Earnings call commentary is constructive overall but includes near-term production and cost headwinds.

Positive Factors

High margins & ROE

Southern Copper exhibits durable earnings power with exceptionally high margins and very strong ROE, reflecting structural operating leverage in its integrated copper business. Sustained margin breadth supports reinvestment capacity, dividend policy and resilience through commodity cycles, underpinning long-term cash earning potential.

Vertical integration & by-products

The company’s integrated mining, smelting and refining chain plus significant by-product streams (zinc, silver, molybdenum, sulfuric acid) structurally lowers unit costs and diversifies revenue. Material by-product credits reduce copper cash cost volatility and provide durable upside when by-product markets are favorable, strengthening margins long-term.

Improving leverage & sizable equity base

Leverage has trended down materially over recent years, leaving a more manageable capital structure relative to an enlarged equity base. That structural improvement increases financial flexibility to fund the $20.5B decade capex program and maintain distributions, while better positioning the company to withstand prolonged commodity downcycles.

Negative Factors

Weak cash generation / negative FCF

Despite strong reported profits, cash conversion has deteriorated sharply to near-zero operating cash flow and material negative free cash flow TTM. This structural cash-generation gap constrains the company’s ability to self-fund sustained capex, absorb price shocks, or expand payouts without accessing external financing, raising long-term financial risk.

Near-term copper production decline

Management expects lower copper output in 2026 driven by declining ore grades at Peruvian operations, reducing near-term scale and putting pressure on revenue and unit-cost absorption. Prolonged grade deterioration delays the benefits of growth projects and can erode long-term free cash flow generation until new capacity ramps.

Project delays & security issues

Security and permitting setbacks at Los Chancas are a structural execution risk that can push timelines and increase development costs. Delays to greenfield or expansion projects slow forecasted production ramps and capex payback, reducing the company’s ability to offset grade declines and meaningfully improve long-term volume growth.

Southern Copper Business Overview & Revenue Model

Company Description

Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Peru, Mexico, Argentina, Ecuador, and Chile. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of molybdenum concentrate and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of zinc and lead. It operates the Toquepala and Cuajone open-pit mines, and a smelter and refinery in Peru; and La Caridad, an open-pit copper mine, as well as a copper ore concentrator, a SX-EW plant, a smelter, refinery, and a rod plant in Mexico. The company also operates Buenavista, an open-pit copper mine, as well as two copper concentrators and two operating SX-EW plants in Mexico. In addition, it operates five underground mines that produce zinc, lead, copper, silver, and gold; a coal mine that produces coal and coke; and a zinc refinery. The company has interests in 82,134 hectares of exploration concessions in Peru; 493,533 hectares of exploration concessions in Mexico; 246,346 hectares of exploration concessions in Argentina; 29,888 hectares of exploration concessions in Chile; and 7,299 hectares of exploration concessions in Ecuador. Southern Copper Corporation was incorporated in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation operates as a subsidiary of Americas Mining Corporation.

How the Company Makes Money

Southern Copper makes money mainly by producing and selling copper (its primary product) and monetizing a portfolio of by-products from the same ore bodies and processing chain. (1) Copper sales: Revenue is driven primarily by sales of refined copper (e.g., cathodes) and copper concentrate. The realized revenue depends on shipment volumes and market-linked pricing for copper, with contracts typically referencing prevailing benchmark metal prices, adjusted for product type, quality, and commercial terms. (2) By-product sales: During mining and processing, the company also recovers and sells molybdenum, silver, zinc, and other metals, as well as industrial products such as sulfuric acid produced in smelting operations. These by-products provide additional revenue streams and can help offset unit costs of copper production when prices are favorable. (3) Vertical integration and processing economics: Because SCCO operates across mining, concentrators, smelters, and refineries, it can capture value across multiple steps of the value chain; earnings are influenced by metal prices, treatment and refining charge dynamics for concentrates, and operating performance of its metallurgical facilities. (4) Key factors affecting earnings: The company’s profitability is largely sensitive to global commodity prices (especially copper and molybdenum), production volumes and grades, operating costs (energy, labor, consumables), currency movements in operating jurisdictions, sustaining and expansion capital needs, and the timing/scale of mine development projects and permitting in Peru and Mexico. Significant partnerships: null

Southern Copper Financial Statement Overview

Summary

Income statement strength is clear (TTM revenue up ~8.8% with very high margins and strong ROE), and leverage is trending more manageable. However, the cash flow profile is a major concern: TTM operating cash flow is near zero and free cash flow is -$0.90B, diverging sharply from strong reported profits and weakening near-term financial flexibility.

Income Statement

Profitability is a clear strength. In TTM (Trailing-Twelve-Months), revenue rose to $13.42B (+8.8% growth) while margins remained exceptionally high (gross margin ~56.7%, operating margin ~53.2%, net margin ~32.3%). The multi-year pattern shows strong earnings power with net margin generally improving versus 2020–2023 levels. The main weakness is revenue cyclicality: growth was negative in 2022 and 2023 before re-accelerating, which is typical for a copper-linked business.

Balance Sheet

Leverage appears manageable and improving. Debt-to-equity is lower in TTM (Trailing-Twelve-Months) at ~0.66 versus ~0.76 in 2024 and ~1.04 in 2020, supported by a growing equity base ($11.04B TTM). Returns on equity are very strong (TTM ~42%), indicating efficient profitability relative to capital. The key watch item is that absolute debt remains sizable (~$7.33B TTM), which can pressure flexibility if the commodity cycle turns.

Cash Flow

Cash generation shows a sharp deterioration in TTM (Trailing-Twelve-Months). Operating cash flow is reported at ~$0.1M and free cash flow at -$0.90B, a dramatic swing versus 2024 when operating cash flow was $4.42B and free cash flow was $3.39B (with free cash flow covering a large portion of earnings). With TTM free cash flow deeply negative despite strong reported profits, the latest period raises concerns about working-capital swings and/or heavy spending, and it materially weakens near-term financial flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	13.42B	11.43B	9.90B	10.05B	10.93B
Gross Profit	7.61B	5.69B	4.32B	4.56B	6.19B
EBITDA	8.02B	6.54B	5.12B	5.38B	6.86B
Net Income	4.33B	3.38B	2.43B	2.64B	3.40B
Balance Sheet
Total Assets	21.38B	18.71B	16.73B	17.28B	18.30B
Cash, Cash Equivalents and Short-Term Investments	4.91B	3.50B	1.75B	2.28B	3.49B
Total Debt	7.41B	7.00B	7.03B	7.10B	7.46B
Total Liabilities	10.28B	9.48B	9.24B	9.13B	10.09B
Stockholders Equity	11.04B	9.17B	7.42B	8.08B	8.15B
Cash Flow
Free Cash Flow	3.43B	3.39B	2.56B	1.85B	3.40B
Operating Cash Flow	4.75B	4.42B	3.57B	2.80B	4.29B
Investing Cash Flow	-1.68B	-673.30M	-1.40B	-666.80M	-972.90M
Financing Cash Flow	-2.01B	-1.65B	-3.10B	-3.01B	-2.48B

Southern Copper Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 166.72
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCCO, the sentiment is Negative. The current price of 166.72 is below the 20-day moving average (MA) of 196.07, below the 50-day MA of 190.02, and above the 200-day MA of 131.90, indicating a neutral trend. The MACD of -5.15 indicates Positive momentum. The RSI at 36.20 is Neutral, neither overbought nor oversold. The STOCH value of 12.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCCO.

Southern Copper Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FCX	78 Outperform	$79.69B	33.25	11.97%	1.25%	2.83%	3.39%
BHP	74 Outperform	$179.03B	6.78	21.41%	3.55%	-7.86%	14.17%
NEM	72 Outperform	$115.90B	15.59	21.72%	0.95%	26.25%	―
RIO	69 Neutral	$152.02B	13.01	16.59%	4.60%	-0.44%	-4.20%
SCCO	68 Neutral	$136.56B	27.74	42.25%	2.07%	12.70%	25.51%
VALE	68 Neutral	$62.55B	22.50	6.34%	10.04%	-8.49%	-41.69%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%