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Southern Copper (SCCO) Valuation Check As Copper Prices Rise And Peru Growth Prospects Gain Attention

Simply Wall St · 4d ago

Investor interest in Southern Copper (NYSE:SCCO) has picked up as copper prices and tight supply conditions draw attention to low cost producers, while recent Peru metals and mining research highlights growth opportunities for key industry players.

See our latest analysis for Southern Copper.

That backdrop of firmer copper prices and tight supply is showing up in the numbers, with Southern Copper’s share price at $160.08, a 1-month share price return of 14.01% and a 1-year total shareholder return of 82.24%. This points to strong momentum rather than fading interest.

If copper’s move has you looking beyond a single miner, this could be a good moment to widen your search and check out fast growing stocks with high insider ownership.

With Southern Copper trading at $160.08, above an average analyst price target of $126.88 and an intrinsic value estimate at a large discount, you have to ask whether there is still a buying opportunity here or whether the market is already pricing in future growth.

Most Popular Narrative: 35.3% Overvalued

Compared with the last close at $160.08, the most followed narrative points to a fair value of $118.29, setting up a clear valuation gap for investors to weigh.

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

Read the complete narrative.

Curious how a large project pipeline, margin assumptions and a premium earnings multiple all feed into that fair value estimate, and where the tight copper market fits into the story, without seeing every number up front.

Result: Fair Value of $118.29 (OVERVALUED)

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

However, it is worth keeping an eye on the risk that prolonged delays at projects like Tia Maria or higher operating costs could unsettle today’s optimistic narrative.

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

Build Your Own Southern Copper Narrative

If you do not fully agree with this view or prefer to work through the assumptions yourself, you can build your own narrative in just a few minutes by starting with 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.

Looking for more investment ideas?

If Southern Copper has your attention, do not stop here. The next step is lining up a few more high quality ideas that fit your style.

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.