SCCO is now overvalued and could go down -25%

Based on our analysis, Southern Copper has received an overvalued rating of 2 out of 5 stars from Cashu. Several key financial ratios indicate that the company might not be worth its current valuation compared to its sector peers. The Price-to-Earnings (PE) ratio for Southern Copper stands at 22.98, significantly higher than the sector average of 15.17. A higher PE ratio suggests that investors are paying more for each dollar of earnings, which could indicate overvaluation. Additionally, the Price-to-Book (PB) ratio is 7.81, while the sector average is only 1.56. A high PB ratio can suggest that a stock is overpriced relative to its book value, further highlighting the potential for overvaluation in Southern Copper. The company’s Dividend Yield is at 1.91, slightly below the sector average of 1.95. This lower yield may not be attractive for income-focused investors, indicating that the stock may not provide sufficient returns through dividends relative to its peers. While Southern Copper demonstrates strong profitability metrics, such as a Net Profit Margin of 29.53 and a Return on Equity (ROE) of 36.82, these strengths are overshadowed by its higher valuation ratios. Investors may want to proceed with caution, given the discrepancy between price and fundamental performance in relation to the sector. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.