Southern Copper (SCCO) Margin Strength Reinforces Bull Narratives Despite Rich P E Multiple

Simply Wall St.04-30

Southern Copper (NYSE:SCCO) has just turned in another solid quarter, with Q4 2025 revenue of US$3.9b and basic EPS of US$1.55, capped by trailing twelve month revenue of US$13.4b and EPS of US$5.20 ...

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Over recent periods the company has seen revenue move from US$11.4b and EPS of US$4.14 on a trailing basis in Q4 2024 to the latest US$13.4b and US$5.20, while net income climbed from US$3.38b to US$4.33b. With margins sitting in the low 30s and earnings growth outpacing the longer term trend, the latest print gives investors plenty to weigh up around the durability of Southern Copper’s profitability profile. See our full analysis for Southern Copper. With the headline figures set, the next step is to line these results up against the most common narratives around Southern Copper to see which storylines the numbers support and which they call into question. See what the community is saying about Southern Copper NYSE:SCCO Earnings & Revenue History as at Apr 2026 AdvertisementMargins Hold Firm at 32.3%  On a trailing basis, Southern Copper is converting US$13.4b of revenue into US$4.33b of net income, which works out to a 32.3% net margin compared with 29.5% a year earlier. Bulls point out that five year earnings growth of 6.8% per year and the most recent 28.4% earnings rise sit alongside this 32.3% margin. They see this combination as evidence that future projects could support strong profitability. However, the current margin is still below the bullish narrative that talks about profit margins rising toward 36.0%. Investors can therefore check whether today’s level feels sufficient against those expectations and the planned step up in capital spending.  Southern Copper delivered {contextual_industry_performance.return_percentage.iloc[0]} returns over the last year. See how this stacks up to the rest of the {contextual_industry_performance.industry_name.iloc[0]} industry. Premium P/E and DCF Gap  The shares trade on a trailing P/E of 32.1x against an industry average of 21.8x and peer average of 24.5x. The current US$168.43 share price sits above the US$140.22 DCF fair value in the data, creating a gap that matters for anyone thinking about how much is already priced in. Bears argue that slower forecast earnings growth of 3.2% per year and revenue growth of 6% per year, combined with this 32.1x P/E and the price sitting above DCF fair value, leave less room for disappointment. That view lines up with concerns about dividend coverage and recent insider selling, which together suggest investors should pay close attention to how much of the recent 28.4% earnings growth is sustainable versus already reflected in valuation.  Skeptics warn that a rich multiple and DCF gap can matter even for quality names when expectations are high. It can be useful to compare this setup with a full bear case before deciding how comfortable you are with the current price level. 🐻 Southern Copper Bear Case Earnings Momentum vs 3.2% Forecasts  On the trailing figures, earnings grew 28.4% over the last year on top of a 6.8% per year pace over five years, while revenue growth sits around 6% per year. The same dataset shows forward earnings growth expectations of 3.2% per year that are slower than the referenced US market forecasts. Supporters of the bullish view highlight these stronger recent earnings and the 32.3% net margin as a base from which new projects and low projected cash costs of US$0.75 to US$0.80 per pound could, in their view, support higher earnings and margins. However, the fact that consensus growth expectations in the data sit at 3.2% annual earnings growth means the bullish case is leaning on outcomes that go beyond those forecasts. This is where individual assumptions about copper demand, project delivery and capital spending discipline really start to matter.  Bulls argue that recent earnings momentum and margin strength point to a bigger long term story than current forecasts suggest. If you want to see how that optimistic case is built project by project, the full bull thesis sets it out in one place. 🐂 Southern Copper Bull Case Next Steps To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Southern Copper on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves. With all these moving pieces, are you leaning more bullish or cautious on Southern Copper right now? Take a closer look at both sides of the story and weigh them against your own expectations, then round out your view by checking the 1 key reward and 2 important warning signs See What Else Is Out There Southern Copper’s rich 32.1x P/E, share price above the US$140.22 DCF fair value and slower 3.2% earnings forecasts raise questions about valuation support. If that mix of a premium price and modest growth expectations makes you uneasy, you can quickly compare alternatives that look cheaper on fundamentals using the 53 high quality undervalued stocks.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    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\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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