Thinking about what to do with Southern Copper shares right now? You are not alone. After the stock’s impressive run, plenty of investors are asking the same question. Southern Copper has handed investors a five-year return of more than 220%, with a year-to-date jump of 44.2% as of the last close at $129.34. Momentum slowed this past week, dipping by 0.4%, but zoom out just a bit and the stock is up over 8% in the past month. It is this combination of recent volatility and long-term growth that has everyone watching closely.
Recent news around global copper demand and reports of new investment in infrastructure have only added fuel to the fire. As supply chain optimism picks up and market-watchers weigh geopolitical developments, Southern Copper finds itself squarely in the spotlight. The company has earned this position with a portfolio that tracks closely to the fortunes of the world’s industrial recovery.
But let’s shift to the big question: Is Southern Copper’s current price justified, or has this sizzling stock run ahead of its value? If you are wondering how undervalued (or overvalued) the company might be, Southern Copper currently scores 0 out of 6 on our valuation check, meaning it does not show signs of being undervalued in any of the six categories we track. Still, valuations are rarely the whole story. Up next, we will break down the different approaches for assessing value and why a modern take on valuation might be more insightful than ever before.
Southern Copper scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and discounting them back to their present value. This approach helps investors figure out what a company’s shares are really worth compared to their current market price.
For Southern Copper, the DCF uses a two-stage Free Cash Flow to Equity model. The company’s last twelve months of Free Cash Flow stand at $3.36 billion, with analyst forecasts suggesting fairly steady, though slightly declining, cash flows over the next decade. By 2029, projected Free Cash Flow is expected to be around $3.00 billion, and by 2035, model extrapolation sees it falling closer to $1.96 billion as growth rates moderate. Most of these future estimates are based on a blend of analyst predictions for the next five years, followed by data-driven extrapolation for the longer term.
Bringing all these cash flows back to today’s dollars gives an estimated intrinsic value for Southern Copper of $48.78 per share. With shares recently trading at $129.34, the DCF model implies the stock is about 165% overvalued at current prices.
Result: OVERVALUED
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Southern Copper.
SCCO Discounted Cash Flow as at Oct 2025
Our Discounted Cash Flow (DCF) analysis suggests Southern Copper may be overvalued by 165.2%. Find undervalued stocks or create your own screener to find better value opportunities.
The Price-to-Earnings (PE) ratio is the preferred valuation tool for profitable companies because it directly connects a company’s share price with its actual ability to generate earnings. Investors can quickly gauge how much they are paying for each dollar of profit, providing a simple litmus test for whether a stock appears reasonably priced or not.
However, what qualifies as a “normal” or “fair” PE ratio depends on several moving parts. Companies expected to grow faster, or with a lower risk profile, tend to command higher PE ratios, while those facing headwinds or greater uncertainty should trade at lower multiples. So, it is important to not look at Southern Copper’s PE in isolation.
Southern Copper currently trades on a PE of 29.1x, which is notably higher than both the industry average of 25.2x and its closest peers at 23.5x. However, simply comparing to peers or industry averages can miss the bigger picture. This is where Simply Wall St’s Fair Ratio comes in. The Fair Ratio is tailored to the company’s specific prospects, factoring in its earnings growth outlook, market position, profit margins, size, and risk profile. This leads to a more balanced reference point for valuation. For Southern Copper, the Fair Ratio is 26.5x. Since the current PE is higher than this fair multiple, the stock appears richly valued based on earnings.
Result: OVERVALUED
NYSE:SCCO PE Ratio as at Oct 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Earlier we mentioned there is an even better way to understand valuation, so let us introduce you to Narratives. Narratives are a smarter, more dynamic way to make investment choices by going beyond the numbers and telling your perspective or story about a company. This approach links its latest business developments, industry trends, and future plans directly to your own forecasts of revenue, earnings, and margins.
With Narratives on Simply Wall St’s Community page, millions of investors can easily connect the dots from a company’s story, through a financial forecast, to an up-to-date fair value estimate. Narratives help you decide whether to buy, hold, or sell by automatically comparing your fair value to the current share price. Because they update whenever key news or earnings are released, your opinion is always based on the most relevant information available.
For example, one Southern Copper Narrative might emphasize major expansion projects and rising metal prices, resulting in a fair value above $130. In contrast, a more cautious Narrative could focus on cost challenges and geopolitical risks, suggesting a fair value closer to $67. Narratives allow you to flexibly express your own investment thesis and see how it compares to the community, making analysis more insightful and actionable than ever before.
Do you think there’s more to the story for Southern Copper? Create your own Narrative to let the Community know!
NYSE:SCCO Community Fair Values as at Oct 2025
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.
Companies discussed in this article include SCCO.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
