Southern Copper (SCCO) AI Stock Analysis

• Market Cap: $180.33B
• Dividend Yield: 2.07%
• Average Volume (3M): 2.27M
• Price to Earnings (P/E): 47.3
• Beta (1Y): 1.25
• 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: 826,062,400
• 10 Day Avg. Volume: 1,439,738
• 30 Day Avg. Volume: 2,267,100
• PEG Ratio: 1.13
• Price to Book (P/B): 10.89
• Price to Sales (P/S): 8.96
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 13.66
• Enterprise Value/Gross Profit: 24.11
• Enterprise Value/Ebitda: 22.89
• 1Y Price Target: $147.51
• Price Target Upside: -32.43% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 10
• EPS Forecast (FY): 6.7
• Revenue Forecast (FY): $15.14B

• Rating: 68 Neutral
• Price Target: $238.00 ▲(9.02% 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 Profitability & Margins

Southern Copper's exceptionally high and sustained margins and ROE demonstrate durable earnings power versus capital employed. Strong margins provide internal funding capacity, cushion through commodity cycles, and support reinvestment in projects and dividends over the medium term.

By‑product Diversification

Material by‑product volumes and credits materially lower net cash cost and diversify revenue away from pure copper exposure. This structural breadth improves margin resilience, reduces cycle sensitivity, and enhances cash generation durability across multi‑metal cycles.

Clear Multi‑year Project Visibility

A well‑defined, funded capex program and visible project milestones (Tía María) give structural production upside over 2028–2031. This multi‑year pipeline supports long-term supply growth, secures future cash flows, and underpins strategic planning and capital allocation decisions.

Negative Factors

Weak Recent Cash Generation

Despite strong accounting profits, cash conversion deteriorated sharply TTM with negative free cash flow. Persistent weak cash generation reduces financial flexibility, complicates funding for capex/dividends and raises sensitivity to working‑capital swings and commodity volatility.

Near‑term Production Decline

Management's 2026 guidance signals a structural near‑term volume reduction driven by lower ore grades and operational choices. Lower production compresses top‑line exposure and delays the timeline for capacity gains from project ramps, increasing medium‑term volatility of cash flows.

Working‑capital & Execution Risks

Rising net operating assets and receivables weigh on cash conversion while project disruption risks (e.g., illegal miners at Los Chancas) create execution uncertainty. These structural operational and working‑capital pressures can delay project timelines and erode near‑term liquidity.

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 generates revenue primarily through the sale of copper and its by-products. The company operates a vertically integrated model, which allows it to control the entire production process from mining to refining. Key revenue streams include the sale of copper cathodes, which are sold to various domestic and international customers, and copper rod, which is used in electrical applications. Additionally, SCCO earns revenue from the sale of molybdenum and zinc, which are generated as by-products of copper production. The company's revenue is significantly impacted by global copper prices, which can fluctuate due to supply and demand dynamics. Strategic partnerships with other mining companies and customers also enhance its market reach and operational efficiency, contributing to its overall earnings.

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	7.33B	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	0.00	3.39B	2.56B	1.85B	3.40B
Operating Cash Flow	0.00	4.42B	3.57B	2.80B	4.29B
Investing Cash Flow	0.00	-673.30M	-1.40B	-666.80M	-972.90M
Financing Cash Flow	0.00	-1.65B	-3.10B	-3.01B	-2.48B

Southern Copper Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 218.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 218.3 is above the 20-day moving average (MA) of 200.89, above the 50-day MA of 178.30, and above the 200-day MA of 125.31, indicating a bullish trend. The MACD of 9.50 indicates Negative momentum. The RSI at 65.21 is Neutral, neither overbought nor oversold. The STOCH value of 86.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$97.84B	44.72	11.98%	1.25%	2.83%	3.39%
BHP	74 Outperform	$210.75B	20.19	21.38%	3.55%	-7.86%	14.17%
NEM	72 Outperform	$141.42B	20.33	22.21%	0.95%	26.25%	―
RIO	69 Neutral	$168.09B	16.15	17.00%	4.60%	-0.44%	-4.20%
SCCO	68 Neutral	$180.33B	47.34	39.45%	2.07%	12.70%	25.51%
VALE	68 Neutral	$73.60B	29.66	6.88%	10.04%	-8.49%	-41.69%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%