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Southern Copper Corp (SCCO)
NYSE:SCCO
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Southern Copper (SCCO) AI Stock Analysis

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SCCO

Southern Copper

(NYSE:SCCO)

Rating:70Outperform
Price Target:
$107.00
▲(6.89% Upside)
Southern Copper's strong financial performance and moderate valuation are the primary drivers of its stock score. While technical indicators suggest a neutral market sentiment, the company's solid financial foundation and shareholder support provide a positive outlook.
Positive Factors
Copper Shipments
Copper shipments of 244kt were 2% higher than the VA consensus of 239kt and above our 239kt forecast.
Cost Control
Copper cash costs after by-products were ahead of the consensus, reflecting better cost control.
Long-term Growth
Southern Copper aims to grow over the next decade with key projects under construction and progressing, indicating a commitment to long-term growth.
Negative Factors
Earnings Miss
Cash from operations of US$721m missed the VA consensus of $899m and our US$950m estimate on higher working capital needs.
Environmental Remediation
Grupo Mexico will be expected to assume the remediation of the environmental and health issues caused by the Buenavista mine copper sulfate spill.
Valuation Concerns
The valuation is considered unattractive with an EV/EBITDA ratio of 11.3x and a free cash flow yield of about 4% for 2025.

Southern Copper (SCCO) vs. SPDR S&P 500 ETF (SPY)

Southern Copper Business Overview & Revenue Model

Company DescriptionSouthern 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 MoneySouthern Copper Corporation generates revenue primarily through the sale of copper, which is extracted from its extensive mining operations in Peru and Mexico. The company processes the mined ore into copper concentrate and cathodes, which are then sold to industrial manufacturers and commodity traders worldwide. Besides copper, SCCO also earns revenue from by-products like molybdenum, zinc, silver, and gold, which are extracted during the copper mining process. The company benefits from long-term contracts and strategic partnerships with major industrial clients, providing a stable revenue stream. Additionally, Southern Copper may engage in hedging activities to manage commodity price fluctuations, further supporting its earnings.

Southern Copper Earnings Call Summary

Earnings Call Date:Jul 28, 2025
(Q3-2024)
|
% Change Since: 1.95%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call for Southern Copper Corporation's third quarter of 2024 highlighted significant financial growth, including increased sales, net income, and adjusted EBITDA. The company's projects, particularly Tia Maria, are showing progress, and production levels for zinc and silver have seen substantial increases. However, there are some concerns, such as a decline in molybdenum prices, regulatory challenges in Mexico and Peru, and ongoing issues with illegal mining at the Los Chancas site. Despite these challenges, the positive aspects of the earnings call are more pronounced, indicating a strong overall performance.
Q3-2024 Updates
Positive Updates
Increase in Copper Prices
The London Metal Exchange copper price increased 10% from an average of $3.79 per pound in the third quarter of 2023 to $4.17 in the third quarter of 2024.
Significant Growth in Zinc Production
Zinc mine production increased by 91% in the third quarter of 2024 compared to the same period in 2023, mainly due to new production at the Buenavista Zinc concentrator.
Record Sales and Revenue Growth
Sales increased by 17% in the third quarter of 2024 compared to the same period in 2023, with total sales reaching $2.9 billion.
Substantial Increase in Net Income
Net income in the third quarter of 2024 was $897 million, representing a 45% increase compared to the third quarter of 2023.
Adjusted EBITDA Growth
Adjusted EBITDA for the third quarter of 2024 was $1,685 million, a 31% increase from the same period in 2023, with an adjusted EBITDA margin of 57%.
Positive Developments in Tia Maria Project
Progress on the Tia Maria project includes a CapEx budget of $363 million for 2025, with the project expected to generate significant employment opportunities.
Increase in Silver Prices and Production
Silver prices increased by 25% in the third quarter of 2024 compared to the same period in 2023, with mined silver production increasing by 22%.
Negative Updates
Decline in Molybdenum Prices
Molybdenum prices averaged $21.68 per pound in the third quarter of 2024, an 8% decrease from the third quarter of 2023.
Copper Production and Sales Gap
A gap between copper production and sales was noted in the third quarter of 2024, with plans to close this gap by the fourth quarter of 2024.
Challenges with Regulatory Environment
Regulatory changes in Mexico and Peru affect exploration activities and concessions, creating potential future uncertainties.
Issues with Illegal Mining at Los Chancas
Ongoing challenges with illegal mining activities at the Los Chancas project in Peru persist, with efforts to eradicate them still ongoing.
Company Guidance
During Southern Copper Corporation's Q3 2024 earnings call, executive Raul Jacob provided comprehensive guidance on the company's performance and outlook. The company reported a 17% increase in sales to $2.9 billion, driven by a 21% rise in copper sales value and an 8% increase in volume. Copper production rose by 11% from the previous quarter, reaching 252,219 tons, with a forecast of 975,000 tons for 2024. Molybdenum, representing 10% of sales, saw a 6% production increase despite an 8% price decrease. Silver and zinc production increased significantly, with silver sales up 46% and zinc mine production up 91%. The adjusted EBITDA for Q3 2024 was $1,685 million, a 31% increase from Q3 2023, with an EBITDA margin of 57%. The operating cash cost, including by-product credits, was $0.76 per pound of copper. The company also announced a quarterly cash dividend of $0.70 per share and a stock dividend, indicating a balanced approach to shareholder returns amidst ongoing capital investments exceeding $15 billion.

Southern Copper Financial Statement Overview

Summary
Southern Copper demonstrates strong profitability and cash flow generation, with efficient operational management. Despite challenges in revenue growth, the company's robust margins and effective leverage management provide a solid financial foundation.
Income Statement
78
Positive
Southern Copper's income statement shows strong profitability with a gross profit margin of 50.55% and a net profit margin of 30.37% for TTM. However, the revenue growth rate has declined by 56.3% in the TTM period, indicating potential challenges in revenue generation. Despite this, the company maintains robust EBIT and EBITDA margins of 50.89% and 58.10%, respectively, reflecting efficient operational management.
Balance Sheet
72
Positive
The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.75, showing manageable leverage. The return on equity is impressive at 38.36%, suggesting effective use of equity to generate profits. The equity ratio stands at 51.05%, indicating a solid equity base relative to total assets.
Cash Flow
75
Positive
Cash flow analysis reveals a healthy operating cash flow to net income ratio of 3.38, indicating strong cash generation relative to net income. Free cash flow has grown by 3.31% in the TTM period, and the free cash flow to net income ratio is 0.77, reflecting efficient cash utilization. These metrics suggest a strong cash flow position, supporting ongoing operations and potential investments.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue11.89B11.43B9.90B10.05B10.93B7.98B
Gross Profit6.01B5.69B4.32B4.56B6.19B3.25B
EBITDA6.91B6.54B5.12B5.38B6.86B3.89B
Net Income3.61B3.38B2.43B2.64B3.40B1.57B
Balance Sheet
Total Assets19.55B18.71B16.73B17.28B18.30B16.95B
Cash, Cash Equivalents and Short-Term Investments4.01B3.50B1.75B2.28B3.49B2.59B
Total Debt700.70M7.00B7.03B7.10B7.46B7.52B
Total Liabilities9.50B9.48B9.24B9.13B10.09B9.67B
Stockholders Equity9.98B9.17B7.42B8.08B8.15B7.22B
Cash Flow
Free Cash Flow3.46B3.39B2.56B1.85B3.40B2.19B
Operating Cash Flow4.50B4.42B3.57B2.80B4.29B2.78B
Investing Cash Flow-1.38B-673.30M-1.40B-666.80M-972.90M-915.80M
Financing Cash Flow-1.65B-1.65B-3.10B-3.01B-2.48B-1.56B

Southern Copper Technical Analysis

Technical Analysis Sentiment
Positive
Last Price100.10
Price Trends
50DMA
97.42
Positive
100DMA
93.92
Positive
200DMA
95.03
Positive
Market Momentum
MACD
-0.56
Negative
RSI
56.66
Neutral
STOCH
76.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCCO, the sentiment is Positive. The current price of 100.1 is above the 20-day moving average (MA) of 96.66, above the 50-day MA of 97.42, and above the 200-day MA of 95.03, indicating a bullish trend. The MACD of -0.56 indicates Negative momentum. The RSI at 56.66 is Neutral, neither overbought nor oversold. The STOCH value of 76.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SCCO.

Southern Copper Risk Analysis

Southern Copper disclosed 31 risk factors in its most recent earnings report. Southern Copper reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Southern Copper Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$73.86B12.0720.26%1.45%39.02%
76
Outperform
$131.94B11.5026.13%4.66%-3.15%54.08%
75
Outperform
$103.26B9.4618.18%6.61%0.03%-3.78%
74
Outperform
$57.25B30.1010.74%1.47%5.98%
74
Outperform
$42.37B8.1813.49%8.32%-12.89%-46.86%
70
Outperform
$76.01B21.0239.07%2.73%13.01%31.25%
61
Neutral
$9.72B6.71-0.14%3.11%2.50%-46.76%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SCCO
Southern Copper
100.10
4.49
4.70%
BHP
BHP Group
52.86
1.58
3.08%
FCX
Freeport-McMoRan
41.87
1.42
3.51%
NEM
Newmont Mining
68.98
22.28
47.71%
RIO
Rio Tinto
61.86
2.54
4.28%
VALE
Vale SA
10.22
0.40
4.07%

Southern Copper Corporate Events

Executive/Board ChangesShareholder Meetings
Southern Copper’s Annual Meeting Highlights Shareholder Support
Positive
May 29, 2025

On May 23, 2025, Southern Copper Corporation held its Annual Meeting of Stockholders, where 97.05% of the eligible shares were voted. Key decisions included the election of nine directors, approval of amendments to the Directors’ Stock Award Plan, ratification of the selection of independent accountants, and a non-binding advisory vote on executive compensation, reflecting strong shareholder engagement and support for the company’s governance and strategic decisions.

The most recent analyst rating on (SCCO) stock is a Hold with a $100.26 price target. To see the full list of analyst forecasts on Southern Copper stock, see the SCCO Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 08, 2025