Southern Copper (SCCO) AI Stock Analysis

• Market Cap: $72.31B
• Dividend Yield: 2.16%
• Average Volume (3M): 1.36M
• Price to Earnings (P/E): 21.1
• Beta (1Y): 1.15
• Revenue Growth: 15.54%
• EPS Growth: 39.64%
• Country: US
• Employees: 15,810
• Sector: Basic Materials
• Sector Strength: 56
• Industry: Mining
• EPS (TTM): 4.25
• Shares Outstanding: 796,182,900
• 10 Day Avg. Volume: 1,412,841
• 30 Day Avg. Volume: 1,360,924
• PEG Ratio: 0.53
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.32
• Price to Cash Flow (P/CF): 6.10
• P/FCF Ratio: 6.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $89.51
• Price Target Upside: -1.59% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

Southern Copper presents a solid financial foundation with strong growth in revenue and profitability, positioning it well in the mining industry. However, technical indicators point to bearish short-term momentum, which could impact near-term performance. The company's valuation is reasonable with a fair P/E ratio and a modest dividend yield, although with higher volatility. Investors should consider the strong financials against the backdrop of current market sentiment and technical challenges.

Positive Factors

Financial Performance

Cash from operations of US$1,361m beat the VA consensus of $959m and our US$954m estimate.

Project Development

Progress on the development of the large Tia Maria project could unlock material value for the company.

Negative Factors

Earnings

SCCO reported 4Q24 EBITDA of $1.5bn, below our estimates and Bloomberg consensus.

Southern Copper Business Overview & Revenue Model

Company Description

Southern Copper Corporation (SCCO) is a leading global mining company primarily engaged in the exploration, mining, and production of copper. Headquartered in Phoenix, Arizona, SCCO operates extensive mining facilities in Peru and Mexico, which are among the most significant copper-producing countries in the world. In addition to copper, the company also produces molybdenum, zinc, silver, and other metals as byproducts, making it a diversified player in the metals and mining sector.

How the Company Makes Money

Southern Copper Corporation generates revenue primarily through the sale of copper and other metals that it extracts and processes from its mining operations. The company's primary revenue stream comes from its large-scale production of copper, which is sold to a variety of customers, including industrial manufacturers, construction companies, and electronics producers. SCCO's operations benefit from economies of scale, enabling it to maintain competitive production costs. Additionally, SCCO capitalizes on the sale of byproducts such as molybdenum, zinc, and silver, which contribute significantly to its earnings. The company's strategic location of mining operations in resource-rich regions and long-term contracts with major customers and governments also play a crucial role in stabilizing and enhancing its revenue streams.

Southern Copper Financial Statement Overview

Summary

Southern Copper's financial statements reflect a robust and growing company with strong profitability and cash flow metrics. The company benefits from a favorable market environment, evidenced by revenue growth and improved margins. While the balance sheet is strong, careful attention to leverage and liabilities is advised to ensure continued financial health. Overall, Southern Copper is well-positioned for future growth in the mining industry.

Income Statement

Southern Copper shows strong financial performance with significant revenue growth of 15.6% in the latest year, driven by increasing demand in the mining sector. The company maintains robust profitability, evidenced by a high EBITDA margin of 51.3% and a net profit margin of 29.5%. The consistent improvement in these margins over the years indicates a stable and effective operational strategy. However, the gross profit margin appears inflated due to the reported gross profit equaling total revenue, which may need clarification.

Balance Sheet

The company has a healthy balance sheet with a low debt-to-equity ratio of 0.14, highlighting strong equity financing. The equity ratio of 49% reflects a well-capitalized structure, supporting financial stability. The return on equity stands at 36.8%, showcasing efficient use of shareholder funds to generate profits. However, the relatively high total liabilities to assets ratio of 50.6% suggests potential leverage risks if not managed cautiously.

Cash Flow

Southern Copper demonstrates excellent cash flow management with a significant free cash flow growth rate of 72.4% over the past year, driven by strong operating cash flows. The operating cash flow to net income ratio of 1.31 further emphasizes effective cash generation from operations. However, the free cash flow to net income ratio of 1.31 indicates room for improving efficiency in converting profits into cash.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
10.94B	11.43B	9.90B	10.05B	10.93B	7.98B
	Gross Profit
5.25B	11.43B	4.32B	4.60B	6.23B	3.28B
	EBIT
5.12B	5.55B	4.19B	4.44B	6.07B	3.12B
	EBITDA
6.01B	5.87B	5.12B	5.23B	6.86B	3.89B
	Net Income Common Stockholders
3.03B	3.38B	2.43B	2.64B	3.40B	1.57B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.75B	3.50B	1.75B	2.28B	3.49B	2.59B
	Total Assets
16.73B	18.71B	16.73B	17.28B	18.30B	16.67B
	Total Debt
7.03B	1.24B	7.03B	7.10B	7.39B	7.45B
	Net Debt
5.88B	-2.02B	5.88B	5.03B	4.39B	5.27B
	Total Liabilities
9.24B	9.48B	9.24B	9.13B	10.09B	9.39B
	Stockholders Equity
7.42B	9.17B	7.42B	8.08B	8.15B	7.22B
Cash Flow		Free Cash Flow
2.55B	4.42B	2.56B	1.85B	3.40B	2.19B
	Operating Cash Flow
3.60B	4.42B	3.57B	2.80B	4.29B	2.78B
	Investing Cash Flow
-1.12B	-673.30M	-1.40B	-666.80M	-972.90M	-915.80M
	Financing Cash Flow
-1.87B	-1.65B	-3.10B	-3.01B	-2.48B	-1.56B

Southern Copper Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 90.96
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCCO, the sentiment is Negative. The current price of 90.96 is below the 20-day moving average (MA) of 93.02, below the 50-day MA of 92.86, and below the 200-day MA of 101.32, indicating a bearish trend. The MACD of -1.22 indicates Positive momentum. The RSI at 46.71 is Neutral, neither overbought nor oversold. The STOCH value of 54.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCCO.

Southern Copper Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VALE	75 Outperform	$41.47B	7.13	16.72%	9.39%	-8.71%	-22.75%
BHP	74 Outperform	$125.09B	11.32	26.13%	5.70%	-3.15%	54.08%
SCCO	72 Outperform	$72.31B	21.14	40.71%	2.16%	15.54%	39.64%
FCX	71 Outperform	$54.15B	28.92	10.92%	1.59%	10.71%	1.94%
RIO	70 Outperform	$104.57B	8.98	20.93%	6.79%	-0.81%	14.59%
TECK.B	59 Neutral	C$28.14B	88.76	1.56%	0.92%	-10.03%	-86.30%
Sector *	47 Neutral	$2.64B	-4.00	-31.55%	3.33%	2.93%	-29.90%