2023-05-10 12:07:18 ET
Southern Copper ( NYSE: SCCO ) -6.9% in Wednesday's trading after Goldman Sachs downgraded to Sell from Neutral with a $66 price target, saying the stock has run ahead of fundamentals after significantly outperforming copper prices and main peer Freeport McMoRan ( FCX ) so far this year.
Goldman said it continues to prefer copper exposure on a long-term basis and views Southern Copper ( SCCO ) as offering investors exposure to high quality copper assets, but the downgrade follows the stock's strong outperformance and limited positive catalysts ahead.
At current valuation and and based on spot copper prices, Goldman's estimated 2023-24 forecasts for Southern Copper ( SCCO ) imply limited free cash flow generation at 4%-5%, well below peers Freeport McMoRan ( FCX ) and Grupo Mexico ( OTCPK:GMBXF ), which are viewed as offering better risk-reward opportunities for investors.
More on Southern Copper:
- See financial and valuation comparisons to sector peers
- SA analysis: Freeport McMoRan And Southern Copper: One Has A Fatter Profit Margin
- Stock price return: Up 19.5% YTD, up 27.5% in the past 12 months
For further details see:
Southern Copper sinks after Goldman cuts to Sell