Southern Copper (SCCO) just saw its short interest jump, with nearly 10% of its float now sold short, even as earnings expectations and a Strong Buy rating point in the opposite direction.
See our latest analysis for Southern Copper.
That tension is playing out against a powerful run in the shares, with the latest share price at $144.02 and a strong upward trend, including a standout 90 day share price return of 38.26 percent and multi year total shareholder returns that signal that momentum is still very much building.
If SCCO’s surge has you rethinking what else might be gathering steam in cyclicals, it could be a good moment to scan fast growing stocks with high insider ownership for fresh ideas.
With the stock now trading above analyst targets and sentiment split between soaring fundamentals and mounting short interest, is Southern Copper still mispriced, or are investors already paying up for all the future growth on offer?
Most Popular Narrative: 21.8% Overvalued
With Southern Copper closing at $144.02 against a widely followed fair value of $118.29, the narrative sees the current optimism running ahead of fundamentals.
The analysts have a consensus price target of $95.247 for Southern Copper based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $128.7, and the most bearish reporting a price target of just $66.63.
Want to know why modest growth assumptions still justify a premium valuation, and which future profit multiple underpins that stance? The full narrative lays out a step by step roadmap from projected revenues to earnings power and the earnings multiple it believes investors will tolerate. If you want to see which specific profitability target everything hinges on, you will need to dig into the detailed breakdown.
Result: Fair Value of $118.29 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, lingering execution setbacks at Tia Maria and escalating operating costs could quickly undermine today’s premium valuation if timelines or margins slip.
Find out about the key risks to this Southern Copper narrative.
Build Your Own Southern Copper Narrative
If you see the story differently or want to test your own assumptions against the numbers, you can build a custom view in just minutes: Do it your way.
A great starting point for your Southern Copper research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
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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.
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