SCCO Should I Buy
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Southern Copper Corp (SCCO) is not a strong buy at the current moment for a beginner investor with a long-term strategy. The stock is facing valuation concerns, weakening near-term operations, and potential production declines through 2027. While the company has shown strong financial performance in the latest quarter, the negative sentiment from analysts, lack of significant trading trends, and technical indicators suggest waiting for a more favorable entry point.
The MACD is negative and expanding (-3.044), indicating bearish momentum. The RSI is at 25.074, suggesting the stock is nearing oversold territory but not yet providing a clear buy signal. Moving averages are converging, showing no strong trend. The stock is trading near its S1 support level of 189.16, with resistance at 204.855. Overall, the technical indicators suggest a bearish trend with no immediate buy signal.
The company reported strong financial performance in Q4 2025, with revenue up 38.98% YoY, net income up 64.74% YoY, and EPS up 58.16% YoY. Gross margin also improved to 56.01%. These metrics highlight robust profitability and operational efficiency.
Analysts have downgraded the stock due to stretched valuation and weakening near-term operations. Production is expected to decline by 3% through 2027, and political risks in Peru add uncertainty. Additionally, the stock's recent rally has led to concerns about limited upside potential. Options data and technical indicators also point to bearish sentiment.
In Q4 2025, Southern Copper delivered strong financial results with revenue of $3.87 billion (+38.98% YoY), net income of $1.31 billion (+64.74% YoY), and EPS of $1.55 (+58.16% YoY). Gross margin improved to 56.01% (+14.80% YoY), showcasing strong profitability and operational efficiency.
Analysts have a predominantly bearish outlook on SCCO. BofA downgraded the stock to Underperform with a price target of $175, citing valuation concerns and weakening operations. Other firms like UBS, JPMorgan, and Scotiabank also have negative ratings, with price targets ranging from $117.50 to $192. The consensus is that the stock's valuation is stretched, and production challenges may weigh on future performance.
