Southern Copper Surges 3.13% on Earnings Beat and Analyst Upgrades: What’s Fueling This Rally?

Summary
• Southern Copper (SCCO) surges 3.13% to $123.805, hitting an intraday high of $124.19
• Q3 earnings beat estimates with $3.38B revenue and $1.35 EPS, driven by higher sales volumes
• Analysts raise price targets, with Jefferies hiking SCCO’s target to $155 from $130
• Copper prices and green energy demand remain central themes in the stock’s trajectory

Southern Copper’s sharp intraday rally reflects a confluence of strong earnings, analyst optimism, and broader copper market dynamics. With the stock trading near its 52-week high, investors are weighing the sustainability of this move against production challenges and geopolitical risks.

Earnings Beat and Dividend Signal Strong Cash Flow
Southern Copper’s 3.13% surge is directly tied to its Q3 2025 earnings report, which exceeded expectations with $3.38 billion in revenue and $1.35 EPS. The company’s declared $0.90 quarterly dividend (payable Nov. 28) underscores its confidence in cash flow generation despite a 7% drop in Peruvian copper production. Analysts at Jefferies and UBS have upgraded SCCO, citing lower cash costs ($0.42/lb post-by-product credits) and the Tía María project’s 2027 ramp-up. However, insider selling and production headwinds in Peru highlight near-term risks.

Copper Sector Gains Momentum as Freeport-McMoRan Trails
The copper sector is rallying on supply constraints and green energy demand, with SCCO outperforming peers like Freeport-McMoRan (FCX), which rose 0.68% intraday. Copper prices hit $11,200/ton on the LME, driven by mine disruptions in Chile and Peru. SCCO’s low cash costs and by-product credits (silver, molybdenum) give it an edge over higher-cost producers. However, FCX’s recent Grasberg mine issues and China’s real estate slowdown could cap sector-wide gains.

Options Playbook: Capitalizing on SCCO’s Volatility
• 200-day MA: $102.66 (well below current price); RSI: 26.48 (oversold); MACD: -0.68 (bearish divergence)
• Bollinger Bands: SCCO is trading near the lower band ($121.59), suggesting potential rebound
• Short-term bearish trend but long-term bullish setup with key support at $121.59 and resistance at $124.19

Top Options Picks:
1. SCCO20251219C135 (Call, $135 strike, Dec 19 expiry):
- IV: 39.18% (moderate)
- Leverage: 69.52% (high)
- Delta: 0.2347 (moderate sensitivity)
- Theta: -0.0856 (moderate time decay)
- Gamma: 0.0224 (responsive to price swings)
- Turnover: 6,333 (liquid)
- Payoff: At 5% upside ($130.00), payoff = $5.00/share. Ideal for aggressive bulls betting on a breakout above $135.
2. SCCO20251219C140 (Call, $140 strike, Dec 19 expiry):
- IV: 38.66% (moderate)
- Leverage: 131.64% (very high)
- Delta: 0.1427 (low sensitivity)
- Theta: -0.0607 (moderate decay)
- Gamma: 0.0167 (modest responsiveness)
- Turnover: 3,809 (liquid)
- Payoff: At 5% upside, payoff = $5.00/share. High-risk, high-reward play for those expecting a sharp rally.

Action: Aggressive bulls may consider SCCO20251219C135 into a bounce above $124.19. Cautious investors should monitor the 200-day MA ($102.66) for a potential long-term entry.

Backtest Southern Copper Stock Performance
The back-test based on buying Southern Copper (SCCO) at each session-close that finished ≥ 3 % above the prior close (January 2022 → 21 Nov 2025, w/10 % stop-loss) is complete.Headline results (in close-to-close terms):• Cumulative return: ≈ 64.5 %• Annualised return: ≈ 19.8 %• Maximum draw-down: ≈ 54.1 %• Sharpe ratio: 0.53A 10 % stop-loss was added as a basic risk-control because no exit rule was specified; this provides a reasonable safeguard while still allowing room for the trade to develop.Open the interactive report below for full details (equity curve, trade log, distribution, etc.):Use the module to explore the performance curve, individual trade outcomes, and return distribution. Let me know if you’d like to tweak the entry rule, adjust exits (e.g., time-based or profit-target), or run the strategy on other tickers or timeframes.

SCCO’s Rally Faces Crucial Test: Hold or Exit?
Southern Copper’s 3.13% surge is a mix of strong earnings and sector tailwinds, but production challenges and insider selling add caution. The stock’s near-term fate hinges on sustaining the $124.19 intraday high and avoiding a breakdown below $121.59. With Freeport-McMoRan (FCX, +0.68%) also rising, the copper sector remains in focus. Investors should watch the 200-day MA ($102.66) as a critical support level and consider SCCO20251219C135 for a high-leverage bet on a breakout. Act now: Secure positions above $124.19 or exit below $121.59 to lock in gains.