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Is Southern Copper Positioned for Further Upside in Adjusted EBITDA?
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Key Takeaways
Southern Copper's Q2 adjusted EBITDA jumped 59.5% y/y as higher prices and cost-control lifted results.
Copper prices near $6.6 per pound and higher metal prices could support further EBITDA gains.
Southern Copper raised its 2026 copper output forecast to 917,000 tons despite lower ore grades.
Southern Copper Corporation (SCCO - Free Report) delivered an adjusted EBITDA of a record $2.86 billion in the second quarter of 2026, marking a year-over-year upside of 59.5%. As a result, Southern Copper's adjusted EBITDA for the first half of 2026 jumped 57.5% year over year to $5.57 billion, expanding the adjusted EBITDA margin from 57.3% last year to 65.2%. The upside was driven by higher metal prices, disciplined cost management and higher revenues.
Southern Copper’s second-quarter revenues increased 40.6% to a record $4.29 billion. Net income attributable to SCCO also reached a record $1.67 billion, rising 71.6% year over year. The net income margin improved to 38.9% from 31.9% in the year-ago period.
However, SCCO’s total copper production decreased 3.6% in the second quarter of 2026 to 232,521 tons due to a decrease in production at the company’s Peruvian operations. While mined silver production fell 3.8%, zinc and molybdenum production fell 14.5% and 11%, respectively, in the same time frame.
Despite the year-to-date fall in production, the company has slightly hiked its 2026 copper production outlook to 917,000 tons from the initially stated 910,000 tons. The figure, however, still implies a 5% year-over-year decline. The downside will be led by lower ore grades at the Cuajone and Peruvian mines. Nonetheless, Southern Copper maintains a strong long-term outlook with production expected to increase to 1.15 million tons by 2031, 1.476 million tons in 2032 and continue rising steadily to reach the above-mentioned 1.6-million-ton target by 2035.
Copper prices are currently near $6.6 per pound, up 47.7% in a year, supported by tight global supply and strong demand. Along with SCCO, its peers Teck Resources Ltd (TECK - Free Report) and Freeport-McMoRan Inc. (FCX - Free Report) are gaining from this rise in copper prices. Higher prices for molybdenum, zinc and silver will also aid growth.
The rally in metal prices this year and its ongoing cost-control efforts position the company for further EBITDA gains in the months ahead.
Southern Copper Peers’ EBITDA Performance
Teck Resources’ adjusted EBITDA for the second quarter of 2026 was CAD$2.2 billion ($1.59 billion), which soared 204% from the year-earlier period. The EBITDA margin was 60.8% in the quarter under review compared with the year-ago quarter’s 35.7%. TECK’s revenues amounted to $2.6 billion, reflecting a 78% year-over-year improvement. Teck Resources’ copper production was around 135,900 tons, 25% higher than the first quarter of 2025, attributed to improved performance across all operations.
Freeport-McMoRan reported an adjusted EBITDA of $3.5 billion for the second quarter of 2026, marking a year-over-year rise of 9.4%. FCX’s revenues declined 7.3% year over year to $7.03 billion. Freeport-McMoRan’s copper production fell 18.4% year over year to 786 million pounds in the reported quarter.
SCCO’s Price Performance, Valuations & Estimates
Southern Copper shares have gained 108.3% year to date compared with the Zacks Mining - Non Ferrous industry’s rise of 69.7%. During this time, the Basic Materials sector has risen 32.2% and the S&P 500 has rallied 23%.
Image Source: Zacks Investment Research
The Southern Copper stock is currently trading at a forward 12-month earnings multiple of 27.57X, which is a premium to the industry average of 22.92X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Southern Copper’s 2026 sales is $16.86 billion, indicating a 25.6% year-over-year jump. The consensus mark for the year’s earnings is pegged at $7.61 per share, suggesting a rally of 45.2%.
The Zacks Consensus Estimate for 2027 sales implies an 11.7% year-over-year dip. The same for earnings suggests a fall of 8.2%.
Earnings estimates for 2026 have moved 0.1% south over the past 60 days, while the same for 2027 have moved up 0.3% over the past 60 days.
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Is Southern Copper Positioned for Further Upside in Adjusted EBITDA?
Key Takeaways
Southern Copper Corporation (SCCO - Free Report) delivered an adjusted EBITDA of a record $2.86 billion in the second quarter of 2026, marking a year-over-year upside of 59.5%. As a result, Southern Copper's adjusted EBITDA for the first half of 2026 jumped 57.5% year over year to $5.57 billion, expanding the adjusted EBITDA margin from 57.3% last year to 65.2%. The upside was driven by higher metal prices, disciplined cost management and higher revenues.
Southern Copper’s second-quarter revenues increased 40.6% to a record $4.29 billion. Net income attributable to SCCO also reached a record $1.67 billion, rising 71.6% year over year. The net income margin improved to 38.9% from 31.9% in the year-ago period.
However, SCCO’s total copper production decreased 3.6% in the second quarter of 2026 to 232,521 tons due to a decrease in production at the company’s Peruvian operations. While mined silver production fell 3.8%, zinc and molybdenum production fell 14.5% and 11%, respectively, in the same time frame.
Despite the year-to-date fall in production, the company has slightly hiked its 2026 copper production outlook to 917,000 tons from the initially stated 910,000 tons. The figure, however, still implies a 5% year-over-year decline. The downside will be led by lower ore grades at the Cuajone and Peruvian mines. Nonetheless, Southern Copper maintains a strong long-term outlook with production expected to increase to 1.15 million tons by 2031, 1.476 million tons in 2032 and continue rising steadily to reach the above-mentioned 1.6-million-ton target by 2035.
Copper prices are currently near $6.6 per pound, up 47.7% in a year, supported by tight global supply and strong demand. Along with SCCO, its peers Teck Resources Ltd (TECK - Free Report) and Freeport-McMoRan Inc. (FCX - Free Report) are gaining from this rise in copper prices. Higher prices for molybdenum, zinc and silver will also aid growth.
The rally in metal prices this year and its ongoing cost-control efforts position the company for further EBITDA gains in the months ahead.
Southern Copper Peers’ EBITDA Performance
Teck Resources’ adjusted EBITDA for the second quarter of 2026 was CAD$2.2 billion ($1.59 billion), which soared 204% from the year-earlier period. The EBITDA margin was 60.8% in the quarter under review compared with the year-ago quarter’s 35.7%. TECK’s revenues amounted to $2.6 billion, reflecting a 78% year-over-year improvement. Teck Resources’ copper production was around 135,900 tons, 25% higher than the first quarter of 2025, attributed to improved performance across all operations.
Freeport-McMoRan reported an adjusted EBITDA of $3.5 billion for the second quarter of 2026, marking a year-over-year rise of 9.4%. FCX’s revenues declined 7.3% year over year to $7.03 billion. Freeport-McMoRan’s copper production fell 18.4% year over year to 786 million pounds in the reported quarter.
SCCO’s Price Performance, Valuations & Estimates
Southern Copper shares have gained 108.3% year to date compared with the Zacks Mining - Non Ferrous industry’s rise of 69.7%. During this time, the Basic Materials sector has risen 32.2% and the S&P 500 has rallied 23%.
The Southern Copper stock is currently trading at a forward 12-month earnings multiple of 27.57X, which is a premium to the industry average of 22.92X.
The Zacks Consensus Estimate for Southern Copper’s 2026 sales is $16.86 billion, indicating a 25.6% year-over-year jump. The consensus mark for the year’s earnings is pegged at $7.61 per share, suggesting a rally of 45.2%.
The Zacks Consensus Estimate for 2027 sales implies an 11.7% year-over-year dip. The same for earnings suggests a fall of 8.2%.
Earnings estimates for 2026 have moved 0.1% south over the past 60 days, while the same for 2027 have moved up 0.3% over the past 60 days.
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.