Southern Copper Corporation (SCCO) Stock Valuation — DCF Analysis
Copper · NYSE
Current Price
$189.79
Intrinsic Value
$149.02
-27.4% margin of safety
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's vertical integration from mining to smelting and refining offers operational efficiencies and control over the entire value chain. This reduces reliance on third parties and captures more margin.
↑Strategic Mine Locations
Its mines are located in politically stable regions with favorable mining regulations. This reduces geopolitical risk and ensures consistent production and expansion capabilities.
INVESTMENT RISKS
↓Commodity Price Volatility
Copper prices are inherently volatile, driven by global economic conditions and demand fluctuations. Significant price drops can severely impact SCCO's revenue and profitability.
↓Environmental and Regulatory Hurdles
Mining operations face increasing environmental scrutiny and stringent regulations. Compliance costs and potential operational disruptions pose ongoing risks to SCCO.
↓Geopolitical and Social Instability
While generally stable, operations in Latin America can be subject to political shifts, labor disputes, and social unrest. These factors can disrupt production and impact costs.
Base case
SCCO base case valuation
A base case discounted cash flow model for SCCO estimates an intrinsic value of about $149.02 per share, against a current price of $189.79. The model assumes 5.8% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$149.02
Margin of safety
-27.4%
Expected annual return
-4.7%
Base case assumptions: 5.8% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
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, a subsidiary of Americas Mining Corporation, was founded in Phoenix, Arizona, in 1952 and operates as a leading player in the mining industry. The company's core business involves the exploration, extraction, smelting, and refining of copper and other essential minerals throughout Peru, Mexico, Argentina, Ecuador, and Chile. Its comprehensive operations cover the full lifecycle of copper production: from the mining, milling, and flotation of copper ore to generate copper and molybdenum concentrates, through the smelting phase to produce blister and anode copper, and culminating in the refining of anode copper into high-purity copper cathodes. Beyond its primary focus on copper, the company also yields molybdenum concentrate, sulfuric acid, refined silver, gold, and other materials such as zinc and lead. Significant operational hubs include: Peru: The open-pit mines of Toquepala and Cuajone, complemented by a smelter and refinery. Mexico: The integrated La Caridad facility, which features an open-pit copper mine, a concentrator, an SX-EW plant, a smelter, a refinery, and a rod plant. Also in Mexico, the Buenavista open-pit copper mine, equipped with two concentrators and two SX-EW plants. Furthermore, the company manages five underground mines that produce zinc, lead, copper, silver, and gold, along with a coal mine for coal and coke, and a zinc refinery. The corporation possesses extensive exploration rights, encompassing 82,134 hectares in Peru, 493,533 hectares in Mexico, 246,346 hectares in Argentina, 29,888 hectares in Chile, and 7,299 hectares in Ecuador.
Financial Metrics — SCCO Stock Valuation Data
Revenue/Share (TTM)
$17.71
FCF/Share (TTM)
$5.20
ROIC (TTM)
25.3%
ROE (TTM)
46.0%
P/FCF
37.0x
EV/EBITDA
18.0x
FCF Yield
2.70%
Debt/Equity
0.63x
Based on trailing twelve-month data, SCCO shows a free cash flow per share of $5.20 and a ROIC of 25.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 37.0x and FCF yield of 2.70% 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 $5.20 in free cash flow per share. At the current price of $189.79, 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 37.0x with a free cash flow yield of 2.70%. 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 ($5.20) 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 0.63x, 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 25.3% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
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 0.63x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 18.0x, 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.