Southern Copper Corporation (SCCO) Intrinsic Value & DCF Valuation
Copper · NYSE
Current Price
$175.47
Intrinsic Value
$97.43
-80.1% margin of safety
What Is Southern Copper Corporation's Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Southern Copper Corporation (SCCO) at $97.43 per share, compared with a market price of $175.47, a margin of safety of -80.1%. The base case assumes 2.7% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $85.28 to $111.81. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Southern Copper Corporation (SCCO) Undervalued?
At the current price of $175.47, SCCO trades above the base-case intrinsic value estimate by a meaningful margin. By this model the stock looks expensive, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Vast, Low-Cost Reserves
SCCO possesses some of the world's largest and lowest-cost copper reserves. This provides a significant cost advantage over competitors, ensuring profitability even in downcycles.
↑Integrated Operations
The company benefits from vertical integration, controlling operations from mining to smelting and refining. This reduces reliance on third parties and captures more value across the supply chain.
↑Scale and Efficiency
SCCO's massive scale allows for significant operational efficiencies and economies of scale. This translates to lower per-unit production costs, a key differentiator in the commodity sector.
INVESTMENT RISKS
↓Geopolitical Instability
SCCO operates in regions with potential geopolitical risks. Political instability, changes in government policy, or social unrest can disrupt operations and impact production.
↓Labor Relations
The company's operations are labor-intensive. Labor disputes, strikes, or union negotiations can lead to production stoppages and increased operating costs.
↓Exploration and Development Costs
Sustaining production requires continuous investment in exploration and development of new reserves. These activities are capital-intensive and carry inherent risks of failure or higher-than-expected costs.
Base case
SCCO base case valuation
Intrinsic Value
$97.43
Margin of safety
-80.1%
Expected annual return
-11.1%
Base case assumptions: 2.7% annual growth, 10.0% discount rate, 25x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SCCO valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Southern Copper Corporation respond.
Open DCF Calculator for SCCOCompany Overview
Southern Copper Corporation engages in mining, exploring, smelting, and refining copper and other minerals in Mexico, the United States, Peru, Brazil, Chile, and Other American countries. The company is involved in the mining, milling, and flotation of copper ore to produce copper and molybdenum concentrates; smelting of copper concentrates to produce blister and anode copper; refining of anode copper to produce copper cathodes; production of copper-molybdenum concentrates and sulfuric acid; production of refined silver, gold, and other materials; and mining and processing of copper, molybdenum, zinc, silver, gold and lead. It operates the Toquepala and Cuajone open-pit mines, smelter, and refinery in Peru; La Caridad, an open-pit copper mine, as well as copper ore concentrator; and SX-EW plant, a smelter, refinery, and rod plant in Mexico. The company also operates Buenavista, an open-pit copper mine, as well as copper concentrators and operating SX-EW plants in Mexico. In addition, it operates underground mines that produce zinc, lead, copper, silver, and gold; coal mine; and zinc refinery. The company has interests in 164,805 hectares and 505,788 hectares of concessions in Peru and Mexico; and 98,634 hectares and 28,453 hectares of exploration concessions in Argentina and Chile. Southern Copper Corporation was formerly known as Southern Peru Copper Corp. and changed its name to Southern Copper Corporation in July 1996. The company was incorporated in 1952 and is based in Phoenix, Arizona. Southern Copper Corporation operates as a subsidiary of Americas Mining Corporation.
Financial Metrics — SCCO Stock Valuation Data
Revenue/Share (TTM)
$19.04
FCF/Share (TTM)
$7.19
ROIC (TTM)
26.2%
ROE (TTM)
49.4%
P/FCF
24.5x
EV/EBITDA
15.0x
FCF Yield
4.07%
Debt/Equity
0.68x
Based on trailing twelve-month data, SCCO shows a free cash flow per share of $7.19 and a ROIC of 26.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 24.5x and FCF yield of 4.07% are important context metrics when evaluating SCCO's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of SCCO?
Southern Copper Corporation currently generates $7.19 in free cash flow per share. At the current price of $175.47, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is SCCO undervalued?
SCCO trades at a P/FCF ratio of 24.5x with a free cash flow yield of 4.07%. This P/FCF is in a moderate range. However, whether SCCO is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value SCCO stock using DCF?
To perform a DCF valuation on Southern Copper Corporation: (1) Start with the trailing free cash flow per share ($7.19) as the base, (2) project future FCF growth over 5-10 years based on Copper industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting SCCO's risk profile — with a debt-to-equity of 0.68x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to SCCO?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Southern Copper Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Copper trends, then discounting those amounts to today's dollars. SCCO's ROIC of 26.2% reflects how efficiently the company converts invested capital into profit.
How does WACC affect SCCO stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For SCCO, with a debt-to-equity ratio of 0.68x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 15.0x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See SCCO PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Basic Materials valuationsDCF and P/E value SCCO with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.