Investors Heavily Search Southern Copper Corporation (SCCO): Here is What You Need to Know

Southern Copper (SCCO) is under watch as its shares have returned +2.5% over the past month, lagging the S&P 500's +6.7% gain. Current quarter earnings are projected to be $1.05 per share, a -13.9% decrease year-over-year, while revenue is estimated at $2.9 billion, a -6.9% decrease; however, the company's last reported quarter showed a revenue surprise of +4.67% and an EPS surprise of +5.31%. With a Zacks Rank #3 (Hold), SCCO is expected to perform in line with the broader market in the near term.

Analysis

Southern Copper Corporation (SCCO) has recently underperformed the broader market, with its shares returning +2.5% over the past month compared to the S&P 500 composite's +6.7% gain, while its Zacks Mining - Non Ferrous industry gained 2%. Current analyst expectations point to near-term challenges, with consensus estimates for the current quarter projecting earnings of $1.05 per share, a 13.9% year-over-year decline, and sales of $2.9 billion, a 6.9% year-over-year decrease. These estimates have seen recent downward revisions; the current quarter EPS estimate fell 3.2% and the current fiscal year EPS estimate ($4.38, representing a +1.2% YoY change) declined 0.6% over the last 30 days. Similarly, the next fiscal year EPS estimate ($4.62, a +5.4% YoY change) has dipped 0.2% in the past month. This contrasts with SCCO's last reported quarter, where revenues grew 20.1% year-over-year to $3.12 billion, surpassing estimates by 4.67%, and EPS of $1.19 beat expectations by 5.31%. The company has a track record of exceeding consensus EPS and revenue estimates in three of the last four quarters. Despite this historical strength, projected revenue growth is mixed: an increase of 3.9% to $11.88 billion for the current fiscal year, followed by a 3.3% decline to $11.49 billion for the next fiscal year. The stock currently holds a Zacks Rank #3 (Hold), suggesting it may perform in line with the market, and its Zacks Value Style Score of C indicates it is trading at par with its peers, offering no immediate valuation-driven upside.

Key Decisions for Investors

• Given SCCO's recent stock underperformance and the Zacks Rank #3 (Hold), investors might consider maintaining current positions, recognizing the mixed outlook which suggests the stock may perform in line with the broader market in the near term.
• Closely scrutinize the upcoming earnings report for the current quarter, particularly in light of the projected 13.9% year-over-year EPS decline and 6.9% year-over-year revenue contraction, and monitor any further revisions to annual forecasts.
• Evaluate whether the modest projected earnings growth for the current (+1.2% YoY) and next fiscal year (+5.4% YoY), tempered by recent downward estimate revisions and a forecasted revenue dip next fiscal year, adequately justifies the current valuation which is considered at par with industry peers.