Southern Copper Surges 4.9% on Copper Strength - Will the Rally Persist?

Southern Copper (SCCO) logged a 4.9% gain in its most recent trading session, closing at $207.93 per share. The uptick arrived on robust volume, signaling genuine investor interest. This single-day jump extends a broader winning streak—the stock has climbed 38.1% over the past month alone, reflecting growing confidence in copper miners as the metal itself continues its upward trajectory.

The Copper Rally Driving the Gains

The real story behind SCCO’s 4.9% pop lies in copper’s stellar performance. The commodity has surged 40.8% over the past year and is now flirting with record highs near $6 per pound. This rally is being fueled by a combination of factors, most notably tightening supply concerns in the global copper market. As industrial demand remains robust and production constraints persist, copper miners like Southern Copper find themselves in an enviable position—producing an increasingly valuable commodity.

Earnings Expectations Look Promising

On paper, SCCO’s fundamentals appear attractive. Wall Street is forecasting quarterly earnings of $1.46 per share, representing a 44.6% year-over-year jump. Revenues are projected to reach $3.62 billion, up 30% from the comparable quarter last year. These kinds of growth figures would typically justify investor enthusiasm and support continued upside momentum.

A Caution Flag Worth Noting

However, there’s a wrinkle worth monitoring. Over the past month, consensus earnings estimates for SCCO have actually been revised downward by 1.3%. While the revision is modest, this shift matters because research indicates that trends in earnings estimate revisions correlate strongly with near-term stock price movements. When estimates head lower—even slightly—it can signal waning analyst confidence and potentially foreshadow choppy trading ahead.

How SCCO Stacks Up Against Peers

Southern Copper isn’t the only mining stock gaining traction. Coeur Mining (CDE), another player in the non-ferrous mining sector, saw shares dip 4.1% to $24.57 in recent trading. Yet CDE has also posted impressive gains, up 43.7% over the past month. Interestingly, Coeur Mining faces a steeper challenge on the earnings front—its consensus EPS estimate has been cut 15.9% over the past month to $0.33. Despite this headwind, CDE carries a stronger Zacks Rank rating (#1, Strong Buy) compared to SCCO’s more cautious #3 (Hold) rating.

What Investors Should Watch

Southern Copper’s 4.9% rally reflects the strong underlying tailwinds in copper markets and the company’s solid profit growth prospects. Yet the slight downward revision in earnings estimates raises a question: Is this recent surge a sign of sustained strength, or a temporary pop before reality sets in? Investors should keep close tabs on how analysts adjust their estimates going forward. If the next round of revisions continues lower, the recent 4.9% gain may struggle to morph into lasting upside. Conversely, if revisions stabilize or turn positive, this rally could have room to run.