BofA Securities upgrades Southern Copper stock rating to Neutral on fading risks

Investing.com - BofA Securities upgraded Southern Copper (NYSE:SCCO) from Underperform to Neutral on Monday, while raising its price target to $108.00 from $75.00. The $79 billion market cap company, which according to InvestingPro data has maintained dividend payments for 30 consecutive years, currently trades near its Fair Value.

The upgrade reflects a significant shift in BofA’s outlook as several previously identified risks have diminished. The firm had maintained a cautious stance on Southern Copper due to capital allocation concerns, execution risk, regulatory uncertainty in Mexico, and potential macroeconomic headwinds related to tariffs. Recent InvestingPro analysis shows the company’s strong financial position with a perfect Piotroski Score of 9 and healthy current ratio of 3.71, suggesting robust operational efficiency.

BofA Securities noted that Southern Copper has secured all necessary licenses and begun constructing access roads for its Tia Maria project, which had faced consistent delays and setbacks in previous years.

On the regulatory front, the 2023 mining reform in Mexico, initially perceived as negative for miners, is being challenged in courts and likely to impact only new concessions or those up for renewal, leaving Southern Copper insulated from these changes.

Despite initial concerns about Liberation Day tariffs, BofA Securities observed that copper fundamentals have strengthened, contributing to their more positive outlook on the company.

In other recent news, Southern Copper Corporation reported the outcomes of its 2025 Annual Meeting of Stockholders. At the meeting, approximately 97.05% of eligible shares were voted, leading to the election of nine directors who will serve until the 2026 annual meeting. Additionally, Southern Copper has been the subject of analyst downgrades. Morgan Stanley (NYSE:MS) downgraded the company’s stock from Equalweight to Underweight, citing concerns about the stock’s valuation, which they believe is trading above its historical average and at a premium compared to industry peers. Despite this downgrade, Morgan Stanley raised its price target for the stock to $99.00. Similarly, UBS downgraded Southern Copper from Buy to Neutral, maintaining a price target of $105.00 per share. UBS highlighted the stock’s 32% rally since April 2025 as a reason for the downgrade, noting it significantly outpaced copper’s 13% price increase during the same period. These developments reflect ongoing investor and analyst scrutiny of Southern Copper’s stock valuation.

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