Southern Copper Stock To $247?

Southern Copper (SCCO) stock has fallen 13% during the past week, and is currently trading at $190.64. Our multi-factor assessment suggests that it may be time to buy more shares of SCCO stock. We have, overall, a positive view of the stock, and a price of $247 may not be out of reach. We believe there is not much to fear in SCCO stock given its overall Very Strong operating performance and financial condition. Hence, despite its Very High valuation, the stock appears Attractive but Volatile.

Below is our assessment:

Ask yourself – Is holding SCCO stock risky? Of course it is. High Quality Portfolio mitigates that risk.

Let’s get into details of each of the assessed factors but before that, for quick background: With $161 Bil in market cap, Southern Copper provides mining, smelting, and refining of copper and other minerals, producing copper and molybdenum concentrates across Peru, Mexico, Argentina, Ecuador, and Chile.

[1] Valuation Looks Very High

This table highlights how SCCO is valued vs broader market. For more details see: SCCO Valuation Ratios

[2] Growth Is Very Strong

• Southern Copper has seen its top line grow at an average rate of 10.5% over the last 3 years
• Its revenues have grown 17% from $11 Bil to $13 Bil in the last 12 months
• Also, its quarterly revenues grew 39.0% to $3.9 Bil in the most recent quarter from $2.8 Bil a year ago.

This table highlights how SCCO is growing vs broader market. For more details see: SCCO Revenue Comparison

[3] Profitability Appears Very Strong

• SCCO last 12 month operating income was $7.0 Bil representing operating margin of 52.2%
• With cash flow margin of 35.4%, it generated nearly $4.8 Bil in operating cash flow over this period
• For the same period, SCCO generated nearly $4.3 Bil in net income, suggesting net margin of about 32.3%

This table highlights how SCCO profitability vs broader market. For more details see: SCCO Operating Income Comparison

[4] Financial Stability Looks Very Strong

• SCCO Debt was $7.4 Bil at the end of the most recent quarter, while its current Market Cap is $161 Bil. This implies Debt-to-Equity Ratio of 4.6%
• SCCO Cash (including cash equivalents) makes up $4.9 Bil of $21 Bil in total Assets. This yields a Cash-to-Assets Ratio of 23.0%

[5] Downturn Resilience Is Moderate

SCCO saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• SCCO stock fell 45.2% from a high of $78.17 on 1 April 2022 to $42.81 on 26 September 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 1 February 2023
• Since then, the stock increased to a high of $218.85 on 2 March 2026 , and currently trades at $190.64

 
2020 Covid Pandemic

• SCCO stock fell 47.0% from a high of $44.41 on 13 January 2020 to $23.53 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 27 July 2020

 
2008 Global Financial Crisis

• SCCO stock fell 80.5% from a high of $47.12 on 29 October 2007 to $9.19 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 13 December 2010

 

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read SCCO Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.