12:32 PM EDT, 07/12/2024 (MT Newswires) -- Southern Copper ( SCCO ) trades "at a premium to the sector," which is expected to persist due to favorable medium-term copper market conditions, UBS said in a note emailed Friday.

"We believe [Southern Copper ( SCCO )] is well positioned as it has long-life low-cost copper assets, a strong balance sheet, a simple structure, and growth optionality through its extensive resources & project pipeline," UBS said.

Risk and reward is balanced with the stock up 65% in the last year, and copper prices are expected to consolidate over the next three to six months amid elevated political risks in Mexico and Peru.

The company plans to expand over the next decade and up it capital expenditure in Tia Maria in Peru, and El Pilar in Mexico, alongside other major growth initiatives like Lac Chancas and Michiquillay in Peru and El Arco in Mexico, with smelter projects in Empalme, Mexico, and Ilo, Peru, starting around 2027 and 2028.

UBS has initiated coverage of Southern Copper ( SCCO ) with a neutral rating and a 12-month price target of $120.

Price: 114.82, Change: +0.23, Percent Change: +0.20