SCCO: Delays At Tia Maria Will Restrict Gains Despite Ongoing Supply Tightness

Analysts have raised their price target for Southern Copper slightly, from $117.76 to $118.29. This adjustment is based on ongoing supply disruptions in the copper market and expectations for higher precious metal prices, which are seen as supportive of the company's outlook.

Analyst Commentary

Recent street research on Southern Copper reflects both optimism and caution among analysts, driven by ongoing supply constraints and shifting price projections in the metals market. The following summarizes the key bullish and bearish takeaways impacting the company's near- and medium-term outlook.

• Bullish analysts cite persistent supply disruptions at several major mines as likely to keep copper markets tight through 2026. This is seen as supporting strong price momentum and company performance.
• Several price target increases reflect expectations for elevated copper and precious metal prices. These expectations translate into higher projected EBITDA and valuation uplifts over the next two years.
• The company continues to deliver robust free cash flow, which is viewed as supporting its attractive dividend policy and offering resilience even in a volatile market.
• Upgrades in analyst ratings suggest an improving execution outlook. There are fewer avenues for investors to access copper beta and increased confidence that Southern Copper can benefit from sector tailwinds.

• Bearish analysts remain cautious due to continued project delays, notably with Tia Maria, which may pressure earnings growth in the latter part of the decade.
• Some firms maintain a neutral or negative stance despite price target hikes. This signals concerns about execution risks and valuation relative to peers.
• While the company is well-positioned in the current cycle, select analysts prefer alternative sector names on valuation grounds. Southern Copper’s premium is cited as a potential constraint on further multiple expansion.

What's in the News

• The U.S. Department of the Interior has added copper and silver to its list of "critical minerals," increasing the likelihood that future U.S. tariff policies could include these materials (Financial Times).
• Southern Copper reported lower total copper production for the third quarter of 2025 at 234,892 tonnes, down from 252,219 tonnes a year ago. Production of molybdenum, zinc, and silver increased over the same period.
• The Board of Directors authorized a quarterly cash dividend of $0.90 per share and a stock dividend of 0.0085 shares per share, payable on November 28, 2025, to shareholders of record as of November 12, 2025.
• Southern Copper completed a significant share buyback totaling 119,497,767 shares, or 13.68% of shares outstanding, for $2.93 billion under a program initiated in 2008.

Valuation Changes

• The Fair Value Estimate has increased slightly from $117.76 to $118.29 per share.
• The Discount Rate has risen marginally from 8.14% to 8.18%.
• Revenue Growth projections are essentially unchanged, remaining at approximately 4.80%.
• The Net Profit Margin is stable, with only a negligible decrease from 31.40% to 31.40%.
• The Future P/E ratio has inched higher from 27.36x to 27.51x.