Southern Copper (SCCO): Assessing Valuation After Analyst Upgrades and Key Project Milestones

Southern Copper (SCCO) is drawing attention after analyst upgrades highlighted its consistent project execution in the face of ongoing copper supply disruptions. With its Buenavista zinc concentrator now running at full strength, investors are watching closely for further developments.

See our latest analysis for Southern Copper.

Southern Copper’s share price has surged 39.5% year-to-date and climbed 17.8% in the last month, reflecting a wave of optimism following analyst upgrades and the ramp-up of major production projects. While this momentum has made the stock a favorite among copper bulls, its 1-year total shareholder return of 13.2% and massive 3-year return of 211% underscore just how far steady project delivery and strong market positioning can carry long-term investors.

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Given the rapid run-up in Southern Copper’s stock price and ongoing analyst optimism, the central question is whether there is still room for upside or if investors are already pricing in all of the company’s future growth potential.

Most Popular Narrative: 29% Overvalued

Southern Copper’s last closing price of $125.10 sits well above the widely followed narrative’s fair value estimate of $97.31, highlighting a notable premium. This valuation gap invites deeper discussion about the company’s capital spending plans and profit outlook.

Southern Copper has announced substantial capital investments totaling over $15 billion, including projects in Mexico and Peru. These investments are expected to drive future production growth and potentially boost revenue significantly. The company's Buenavista zinc concentrator is now operating at full capacity and is anticipated to drive a 31% increase in zinc production in 2025. This development could enhance revenues and improve net margins due to more efficient operations.

Read the complete narrative.

What bold assumptions power this high valuation? Massive production expansion, aggressive margin forecasts, and a forward profit multiple comparable to industry giants. Uncover the numbers fueling these expectations by reading the full narrative.

Result: Fair Value of $97.31 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent project delays and unexpected cost increases could threaten Southern Copper’s future earnings growth and challenge even the most optimistic projections.

Find out about the key risks to this Southern Copper narrative.

Build Your Own Southern Copper Narrative

If you have a different perspective or want to dive deeper into the numbers yourself, you can build your own narrative in under three minutes, or Do it your way.

A great starting point for your Southern Copper research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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