Southern Copper (SCCO) AI Stock Analysis

• Market Cap: $174.04B
• Dividend Yield: 2.07%
• Average Volume (3M): 2.27M
• Price to Earnings (P/E): 45.7
• 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: 1.05
• Enterprise Value/Revenue: 14.86
• Enterprise Value/Gross Profit: 28.00
• Enterprise Value/Ebitda: 25.44
• 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: 76 Outperform
• Price Target: $215.00 ▼(-1.51% Downside)
• Action: Reiterated Date: 01/31/26
• Date: Action: Reiterated 01/31/26

The score is driven primarily by strong financial performance (robust margins, solid balance sheet, and healthy cash generation) and supportive technical uptrend signals. Offsetting these strengths are a demanding valuation (high P/E, modest yield) and earnings-call risks centered on lower 2026 production guidance and cost/operational headwinds despite strong recent results.

Positive Factors

High Profitability Margins

Southern Copper's very high margins reflect low unit costs, strong by‑product credits and efficient vertical integration. These durable margins generate operating resilience, funding for capital programs and dividends, and provide a long‑term cushion against copper price cycles.

Strong Cash Generation and Conversion

Robust cash generation and high conversion ratios indicate durable internal funding capacity. Consistent FCF growth supports the company’s >$20.5B capex plan, recurring dividends and balance sheet flexibility, reducing reliance on external financing across commodity cycles.

Project Visibility and Long‑term Production Ramp

Confirmed milestones and committed funding for Tía María and a staged multi‑year ramp provide structural capacity growth. Successful delivery would materially increase output and diversify supply timing, underpinning long‑term revenue growth beyond near‑term production dips.

Negative Factors

Near‑term Production Decline

The 2026 guidance cut driven by lower ore grades signals a sustained near‑term volume shortfall. Lower output over multiple quarters reduces revenue capacity and can raise unit costs as fixed operating overheads are spread over fewer pounds, delaying cash flow growth.

Rising Operating Costs and One‑offs

Significant quarterly cost increases and one‑time charges highlight cost inflation and exposure to wage, contractors and currency pressures. If sustained, these trends can compress margins absent continued by‑product tailwinds or higher metal prices, pressuring long‑term profitability.

Execution and Security Risks at Projects/Mines

Illegal miners and security/permitting issues at Los Chancas, plus strategic mine sequencing at Buenavista that favors zinc over copper, increase execution and operational variability. These structural risks can delay project timelines and make production forecasting less reliable.

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

Strong profitability and efficiency with robust TTM margins (gross 53.09%, net 30.98%) and improving revenue growth (TTM +3.76%). Balance sheet is solid with improving leverage (debt-to-equity 0.70) and high ROE (39.01%). Cash generation is healthy with positive FCF growth (TTM +10.59%) and strong cash conversion (operating cash flow to net income 2.72).

Income Statement

Southern Copper shows strong profitability with a consistent increase in gross and net profit margins over the years. The TTM data indicates a gross profit margin of 53.09% and a net profit margin of 30.98%, both of which are robust. Revenue growth is positive at 3.76% in the TTM, indicating a recovery from previous declines. EBIT and EBITDA margins are also strong, reflecting efficient operations.

Balance Sheet

The company's balance sheet is solid with a debt-to-equity ratio of 0.70 in the TTM, showing a decrease from previous years, which indicates improved leverage management. Return on equity is high at 39.01%, demonstrating effective use of equity to generate profits. The equity ratio is stable, reflecting a balanced capital structure.

Cash Flow

Cash flow metrics are strong, with a free cash flow growth rate of 10.59% in the TTM, indicating healthy cash generation. The operating cash flow to net income ratio is 2.72, suggesting good cash conversion efficiency. The free cash flow to net income ratio is 0.83, indicating that a significant portion of net income is converted into free cash flow.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.33B	13.42B	11.43B	9.90B	10.05B	10.93B
Gross Profit	6.55B	7.61B	5.69B	4.32B	4.56B	6.19B
EBITDA	7.21B	8.02B	6.54B	5.12B	5.38B	6.86B
Net Income	3.82B	4.33B	3.38B	2.43B	2.64B	3.40B
Balance Sheet
Total Assets	20.33B	21.38B	18.71B	16.73B	17.28B	18.30B
Cash, Cash Equivalents and Short-Term Investments	4.53B	4.91B	3.50B	1.75B	2.28B	3.49B
Total Debt	7.43B	7.33B	7.00B	7.03B	7.10B	7.46B
Total Liabilities	9.81B	10.28B	9.48B	9.24B	9.13B	10.09B
Stockholders Equity	10.45B	11.04B	9.17B	7.42B	8.08B	8.15B
Cash Flow
Free Cash Flow	3.48B	0.00	3.39B	2.56B	1.85B	3.40B
Operating Cash Flow	4.62B	0.00	4.42B	3.57B	2.80B	4.29B
Investing Cash Flow	-1.40B	0.00	-673.30M	-1.40B	-666.80M	-972.90M
Financing Cash Flow	-1.83B	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 200.24, above the 50-day MA of 176.77, and above the 200-day MA of 124.66, indicating a bullish trend. The MACD of 9.03 indicates Negative momentum. The RSI at 64.02 is Neutral, neither overbought nor oversold. The STOCH value of 88.68 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	$97.56B	44.58	11.98%	1.25%	2.83%	3.39%
SCCO	76 Outperform	$174.04B	45.69	39.45%	2.07%	12.70%	25.51%
BHP	74 Outperform	$198.16B	19.71	21.38%	3.55%	-7.86%	14.17%
NEM	72 Outperform	$134.99B	19.41	22.21%	0.95%	26.25%	―
RIO	69 Neutral	$165.65B	15.95	17.00%	4.60%	-0.44%	-4.20%
VALE	68 Neutral	$73.06B	29.40	6.88%	10.04%	-8.49%	-41.69%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%