SCCO Valuation Models at Odds Over Fair Value

Southern Copper Corp (SCCO) has seen a remarkable price performance over the past year, with a 114.4% increase.

The stock is currently priced at $208.56, reflecting a strong year-to-date gain of 52.2%, but our valuation models present a divergence in their conclusions.

In our DCF earnings-based model, we utilized a two-stage approach to estimate the intrinsic value of SCCO.

The first stage accounts for a high growth rate in earnings over the next ten years, while the second stage reflects a more modest terminal growth rate thereafter.

We calculated that the intrinsic value using this model is $208.63, which suggests that the stock is fairly valued with a margin of safety of 0.0%.