JPMorgan has adjusted its outlook on Southern Copper Corporation (NYSE:SCCO), moving the stock's rating from Neutral to Underweight as of Friday. Alongside this rating change, the investment firm revised its price target down slightly to $117.50 from $119.50, indicating an anticipated price decline of approximately 33% relative to the stock's recent closing price of $176.41.
This downgrade follows a significant appreciation in Southern Copper's share price, which increased by nearly 46% over the preceding three-month period. Such a surge has elevated the company’s valuation to levels JPMorgan now considers unjustifiably high. Supporting this view, data from InvestingPro demonstrates that Southern Copper has yielded a 93.8% total return over the past twelve months, currently trading at a price-to-earnings ratio of 38.28.
One of JPMorgan's critical considerations is the outlook for copper prices, which the broker forecasts will decline from the present rate of $12,780 per metric ton down to $12,000 in the near term. Given that Southern Copper's performance is strongly correlated to fluctuations in copper prices, a decrease in the commodity's value is expected to weigh on the company’s stock price.
Examining valuation multiples, Southern Copper is currently priced at an estimated 17.1 times enterprise value to EBITDA for the fiscal year 2026. The bank's revised price target implies a significant downside potential near 33% from prevailing market levels. InvestingPro figures corroborate this, showing a current EV/EBITDA ratio at 20.84 and noting technical indicators suggest the stock is overbought. According to InvestingPro's Fair Value assessment, market pricing exceeds justified valuation metrics at this time.
In terms of financial performance, Southern Copper reported robust third-quarter 2025 results, surpassing analysts’ consensus forecasts. The company achieved earnings per share of $1.35, outperforming the predicted $1.22, alongside revenues totaling $3.4 billion versus projections of $3.19 billion. These figures represent an earnings surprise of approximately 10.66%, underscoring solid operational execution during the quarter.
Notably, UBS has also revised its rating on Southern Copper, lowering it from Neutral to Sell, despite an increase in its price target to $148. This update occurs after the stock price climbed roughly 153% since April 2025, outstripping the appreciation seen in copper prices over the same interval. These mixed signals from major brokers highlight diverging views on the stock’s medium-term prospects.
Overall, the latest analyst activity around Southern Copper underscores heightened market sensitivity to commodity price trends and valuation concerns, despite strong underlying financial results and operational performance.