Summary of J.P. Morgan Copper Dashboard Industry Overview - **Industry**: Copper Mining - **Current Trends**: Global copper production is experiencing a 4% year-to-date increase through August, but growth is slowing due to recent supply disruptions. Global demand has risen by 7% year-to-date as of August, with notable contributions from China, although demand from the rest of the world (RoW) is declining. Global visible inventories have increased to approximately 730,000 tons, which is about 200,000 tons higher than in 2024 and at a five-year seasonal high [1][2][3]. Key Insights 1. **Production and Demand**: - Global copper production increased by 4% year-to-date through August, but there has been a year-over-year decline in output for July and August [1]. - Global demand for copper rose by 7% year-to-date as of August, with Chinese demand growth being offset by a decline in RoW consumption [1]. - The refined copper market is expected to face a deficit of 333,000 tons in 2026 and 162,000 tons in 2027 due to acute supply disruptions [2]. 2. **Price Movements**: - LME copper prices have increased by 25% this year, reaching $4.91 per pound, significantly outperforming aluminum, which saw an 11% increase [1]. - The forward curves for copper are slightly backwardated, indicating potential upside risks to prices due to recent supply disruptions pushing the market into a deficit [1]. 3. **Equity Preferences**: - J.P. Morgan continues to favor specific companies in the copper sector, including Capstone Copper (Overweight), BHP (Overweight), Antofagasta (Overweight), Freeport (Overweight), and First Quantum (Overweight) [1]. 4. **Regional Insights**: - In Chile, overall copper output is expected to remain flat at around 5 million tons per annum, with Codelco facing production challenges. Miners are focusing on technology and innovation to extend mine life and reduce costs, although regulatory reforms are slow [3]. - Labor and equipment markets are tightening, with new activities primarily centered on brownfield projects rather than major expansions [3]. 5. **Market Dynamics**: - High-frequency data shows mixed signals: treatment charges and refining charges (TC/RCs) are firmly negative, while LME net speculative positioning is increasing. However, cancelled warrants and smelter operating rates are declining [1]. - The copper market is expected to tighten as Chinese demand begins to pull on the market, potentially leading to a bullish backdrop for LME copper prices [2]. Additional Important Points - **Global Inventory Trends**: The increase in global visible inventories to ~730,000 tons indicates a significant build-up, which could impact future pricing and supply dynamics [1]. - **Technological Innovations**: The industry is pushing for technological advancements, particularly in ore sorting and chloride-based leaching, to enhance efficiency and reduce costs [3]. - **Investment Recommendations**: J.P. Morgan's coverage includes various companies with differing ratings, highlighting potential investment opportunities and risks within the copper sector [7]. This summary encapsulates the key points from the J.P. Morgan Copper Dashboard, providing insights into the current state of the copper industry, production and demand trends, pricing dynamics, and investment recommendations.

Industry Overview - The Zacks Mining - Non Ferrous industry is currently experiencing promising prospects due to rising metal prices and increasing demand for non-ferrous metals driven by energy-transition trends [1][4] - Non-ferrous metals such as copper, gold, silver, cobalt, molybdenum, zinc, aluminum, and uranium are essential across various sectors including aerospace, automotive, and renewable energy [3][6] - The industry is characterized by a complex and capital-intensive mining process, with companies focusing on reserve growth and resource enhancement through exploration and acquisitions [3] Metal Price Trends - Copper futures recently peaked at $5.1 per pound, marking a 25% increase over the past year, while silver prices surged 84% year-to-date, currently at $53 per ounce [4] - Gold prices have also risen by 58.8% year-to-date, reaching $4,150 per ounce, supported by expectations of lower interest rates and tightening supply [4] - Uranium prices recently retreated to $77 per pound after reaching a 14-month high of $84, with supply concerns easing [4] Demand Drivers - The demand for non-ferrous metals is expected to remain high, particularly due to the growth of electric vehicles and renewable energy initiatives [6] - The U.S. Infrastructure Investment and Jobs Act is anticipated to drive significant demand for non-ferrous metals as infrastructure upgrades and green policies are implemented [6] Industry Challenges - The industry faces challenges such as a shortage of skilled workforce, rising production costs, and supply chain issues, which have led to increased operational expenses [5] - Companies are focusing on cost-reduction strategies, digital innovation, and alternative energy sources to mitigate these challenges [5] Investment Opportunities - Companies like Southern Copper Corporation (SCCO), Lundin Mining Corporation (LUNMF), Coeur Mining (CDE), and Centrus Energy (LEU) are well-positioned to capitalize on industry growth through reserve building and technological investments [2][17][21][24] - SCCO has a significant capital investment program exceeding $15 billion, primarily in Peru, and is expected to produce substantial copper outputs in the coming years [17][18] - LUNMF has reported strong operational performance, with a year-to-date stock gain of 111.7% and an increase in copper production guidance [23] - Centrus Energy is expanding its uranium enrichment capabilities, with a revenue backlog of $3.9 billion and plans for significant production increases [26] Market Performance - The Zacks Mining - Non Ferrous industry has outperformed the Zacks Basic Materials sector, gaining 10.1% over the past year, while the sector declined by 3.6% [10] - The industry's current trailing 12-month EV/EBITDA ratio is 10.59X, significantly lower than the S&P 500's 18.43X, indicating potential valuation upside [13]

Core Viewpoint - Southern Copper reported strong third-quarter earnings, beating estimates and showing year-over-year growth in sales and operating profit, despite a decline in copper production and sales volumes [2][3][4]. Financial Performance - Earnings per share for Q3 2025 were $1.35, exceeding the Zacks Consensus Estimate of $1.25, marking a 21% increase year over year [2]. - Sales rose 15% year over year to $3.38 billion, surpassing the Zacks Consensus Estimate of $3.16 billion [3]. - Operating profit increased by 22% year over year to $1.77 billion, with an operating margin of 52.4%, up from 49.5% in the previous year [4]. Production and Sales Details - Copper production decreased by 6.9% year over year to 234,892 tons, with a 3.6% decline in copper sales to 234,300 tons [5][6]. - Molybdenum production grew by 8.3% year over year to 7,874 tons, while zinc production surged 46% to 45,482 tons [6][7]. - Silver production increased by 16.4% to 6.21 million ounces, with sales rising 21.9% to 6.32 million ounces [7]. Cash Flow and Balance Sheet - Net cash from operating activities was $1.56 billion, up from $1.44 billion in the same quarter of 2024 [8]. - Cash and cash equivalents reached $3.95 billion, an increase from $3.26 billion at the end of 2024, while long-term debt rose to $6.75 billion from $5.76 billion [8]. Future Guidance - Southern Copper anticipates copper production of approximately 958,800 tons for 2025, a 2% decrease from the previous year, while projecting a 34% increase in zinc production to 174,700 tons [9]. - Silver production is expected to be around 23 million ounces, a 10% increase from 2024, and molybdenum production is projected to rise by 4% to 30,000 tons [9]. Market Sentiment - Recent estimates for Southern Copper have shown a downward trend, although the company holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [10][12].

Core Insights - Freeport-McMoRan Inc. (FCX) and Southern Copper Corporation (SCCO) are major players in the copper mining industry, facing challenges from fluctuating copper prices and global economic uncertainties [1] - Copper prices have shown volatility throughout the year, influenced by global economic conditions and trade tensions, with prices fluctuating between approximately $4.1 and $5.96 per pound [2][3] Freeport-McMoRan Inc. (FCX) - FCX is focused on high-quality copper assets and organic growth opportunities, with significant expansions at Cerro Verde in Peru and potential projects at El Abra in Chile [5][6] - The company has a strong liquidity position, generating operating cash flows of around $1.7 billion in Q3 2025, with $4.3 billion in cash and equivalents [8] - FCX's net debt stands at $1.7 billion, below its target range, and it has a policy of distributing 50% of available cash to shareholders [9][10] - However, FCX faces rising costs, with average unit net cash costs increasing to $1.40 per pound in Q3 2025, and projected to rise to $2.47 per pound in Q4 2025 [11][12] - Copper sales volumes fell approximately 6% year-over-year in Q3 2025, primarily due to operational suspensions at the Grasberg mine [13][14] Southern Copper Corporation (SCCO) - SCCO has a robust pipeline of copper projects, with over $15 billion earmarked for capital investments, particularly in Peru [15][16] - The Michiquillay project is expected to produce 225,000 tons of copper annually, with production starting by 2032 [17] - SCCO generated net cash from operating activities of $4.42 billion in 2024, reflecting a 24% increase from the previous year, and $1.56 billion in Q3 2025 [19] - The company offers a dividend yield of 2.9% with a payout ratio of 67% and a five-year annualized dividend growth rate of approximately 0.6% [19] Comparative Analysis - FCX is trading at a forward 12-month earnings multiple of 23.18X, while SCCO is at 22.57X, both above their five-year medians [21][22] - Year-to-date, FCX stock has gained 7.9%, while SCCO stock has increased 41.7% [23] - FCX's return on equity is 7.8%, significantly lower than SCCO's 38.8%, indicating SCCO's more efficient use of shareholder funds [27] - The consensus estimates for SCCO suggest year-over-year growth in sales and EPS, while FCX's estimates imply a decline in sales and modest EPS growth [25][29] Investment Outlook - Both companies are advancing their growth projects amid a volatile copper pricing environment, with FCX focusing on expansion activities and SCCO committed to low-cost production [31][32] - SCCO's higher earnings growth projections and effective utilization of shareholder funds suggest it may offer better investment prospects in the current market [32] - FCX currently holds a Zacks Rank of 3 (Hold), while SCCO has a Zacks Rank of 1 (Strong Buy) [33]

Core Viewpoint - The article emphasizes the importance of protecting investments, particularly in the Mining and Real Estate sectors, while also highlighting the author's personal investment interests [1]. Group 1 - The author works on the buy-side in Fixed Income and has a special interest in the Mining and Real Estate sectors [1]. - The article serves as a reminder to investors to "Always Protect Your Nuts," indicating a focus on risk management in investment strategies [1]. Group 2 - The author has a beneficial long position in the shares of SCCO, indicating confidence in the company's performance [2]. - The article expresses the author's personal opinions and does not involve compensation from any company mentioned, ensuring an unbiased perspective [2].

Core Insights - Wall Street has experienced a significant rally in 2023, primarily driven by advancements in artificial intelligence (AI) technology, particularly generative and agentic AI, which have transformed the information technology sector globally [1] Group 1: Non-Tech Stocks with Growth Potential - Several non-tech companies have emerged as strong investment opportunities alongside tech giants, with a favorable Zacks Rank indicating potential for fruitful investments by 2026 [2] - The selected non-tech stocks include Southern Copper Corp. (SCCO), HCA Healthcare Inc. (HCA), General Motors Co. (GM), Morgan Stanley (MS), and Capital One Financial Corp. (COF), all holding a Zacks Rank 1 (Strong Buy) [2] Group 2: Southern Copper Corp. (SCCO) - Southern Copper has the largest copper reserves in the industry and operates in investment-grade countries like Mexico and Peru, positioning it for enhanced performance through low-cost production and growth investments [5][6] - The company has a capital investment program exceeding $15 billion for this decade, with approximately $10.3 billion allocated to Peru, the second-largest copper producer [6] - SCCO's expected revenue and earnings growth rates for the next year are 1.5% and 12.1%, respectively, with a 14.4% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [8] Group 3: HCA Healthcare Inc. (HCA) - HCA Healthcare's revenues have increased by 7.2% year over year in the first nine months of 2025, driven by growth in admissions and inpatient surgeries, with projected revenues of $75-$76.5 billion for 2025 [11] - The company has engaged in multiple buyouts to expand its network and increase patient volumes, alongside a significant share repurchase of $7.5 billion and dividend payments of $517 million in the same period [12] - HCA's expected revenue and earnings growth rates for the next year are 4.3% and 8.4%, respectively, with a 5% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [13] Group 4: General Motors Co. (GM) - General Motors holds a 17% market share as the top-selling U.S. automaker, with strong demand for its brands and a 10% year-over-year sales increase in China [14] - The company's software and services division has generated $2 billion in revenue year to date, supported by 11 million OnStar subscribers, and it maintains strong liquidity of $35.7 billion [15] - GM's expected revenue and earnings growth rates for the next year are -0.7% and 7.9%, respectively, with a 0.6% improvement in the Zacks Consensus Estimate for next year's earnings over the last seven days [16] Group 5: Morgan Stanley (MS) - Morgan Stanley's focus on wealth and asset management, along with strategic acquisitions like EquityZen, is expected to enhance its top line, with projected revenue and investment banking fee increases of 11.7% and 12.8% in 2025 [17] - Despite challenges in trading revenue growth due to market volatility, the company maintains a solid balance sheet with efficient capital distributions [18] - MS's expected revenue and earnings growth rates for the next year are 4.1% and 5.8%, respectively, with a 0.1% improvement in the Zacks Consensus Estimate for next year's earnings over the last seven days [18] Group 6: Capital One Financial Corp. (COF) - Capital One's third-quarter 2025 results benefited from higher revenues, particularly from the Discover Financial acquisition, reshaping the credit card landscape [19] - Strong consumer loan demand is anticipated to support COF's net interest income, with solid credit card and online banking operations contributing to revenue growth [20] - COF's expected revenue and earnings growth rates for the next year are 18% and 6.2%, respectively, with a 2.5% improvement in the Zacks Consensus Estimate for next year's earnings over the last 30 days [20]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Financial Performance - In Q3 2025, net sales reached $3,377.3 million, a 15.2% increase compared to Q3 2024, driven by higher sales volumes of molybdenum (+7.9%), silver (+21.9%), and zinc (+7.3%) along with increased copper prices (+6.5% LME; +14.2% COMEX) [197] - Net income attributable to the company for Q3 2025 was $1,107.6 million, marking a 23.5% increase from Q3 2024, primarily supported by increased net sales [198] - Operating income for Q3 2025 was $1,768.8 million, a 22.0% increase from Q3 2024, reflecting improved financial performance [195] - Earnings per share for Q3 2025 increased to $1.35, a 19.9% rise compared to $1.12 in Q3 2024 [195] - For the nine months of 2025, net sales increased by 10.4% compared to the same period in 2024, supported by higher sales volumes of molybdenum (+6.7%), silver (+16.6%), and zinc (+18.7%) [200] - The company reported a net income attributable to SCC of $1,107.6 million for Q3 2025, a 23.5% increase from Q3 2024, and $3,027.0 million for the nine months, a 17.2% increase [254] Production and Sales Volumes - Copper production in Q3 2025 was 517.8 million pounds, a 6.9% decrease from Q3 2024, mainly due to lower production at Buenavista (-10.7%) and Toquepala (-8.4%) [202] - Molybdenum production increased by 8.3% in Q3 2025 compared to Q3 2024, driven by La Caridad (+24.2%) and Toquepala (+10.0%) mines [203] - Silver mine production rose by 16.4% in Q3 2025, mainly due to La Caridad (+44.7%) and Buenavista (+37.5%) operations [204] - Zinc production surged by 46.3% in Q3 2025, primarily due to full-capacity operations at the Buenavista Zinc concentrator, producing 30,086 tonnes (+108.2%) in Q3 2025 [205] - Total copper sales for Q3 2025 were 516.5 million pounds, a decrease of 19.4 million pounds or 3.6% from Q3 2024 [265] - Copper sales volume for Q3 2025 was 516.5 million pounds, a 3.6% decrease from Q3 2024, with refined copper sales down by 25.3% [259] Costs and Expenses - Operating costs and expenses for Q3 2025 totaled $1,608.5 million, an increase of $127.9 million (8.6%) from Q3 2024, primarily due to higher costs in labor, energy, and materials [260] - Operating costs for the first nine months of 2025 were $4,658.9 million, an increase of $257.2 million (5.8%) from the same period in 2024, driven by higher costs in labor and materials [261] - Operating cash cost per pound of copper produced before by-product revenues increased from $1.96 to $2.23 in Q3 2025, a rise of 13.9% [218] - Operating cash cost for Q3 2025 was $1,102.8 million, or $2.23 per pound, compared to $1,046.2 million, or $1.96 per pound in Q3 2024, reflecting an increase of 5.4% [290] Capital Investments and Projects - Capital investments in Q3 2025 totaled $349.2 million, representing 31.4% of net income and a 41.7% increase compared to Q3 2024 [193] - The company expects to invest over $10.3 billion in Peruvian projects over the next decade, supported by local communities and government [226] - The Tia Maria project in Arequipa, Peru, is projected to generate $18.2 billion in exports and contribute $3.8 billion in taxes and royalties over the first 20 years, with a budget of $1,802 million [229] - Capital investments reached $902.7 million in the first nine months of 2025, up from $792.0 million in the same period of 2024, reflecting a 14% increase [224] - Significant investments in Mexican operations included $309.0 million for replacement and maintenance expenditures [289] Sustainability and Social Responsibility - The company has reduced greenhouse gas emissions by 180,000 carbon tons in 2025, equivalent to the electricity supply needed for 40,000 households in Mexico [245] - The company’s sustainability ratings improved, with S&P Global increasing its rating by four points, positioning it among the leaders in the mining sector [244] - The Health Train initiative provided over 20,000 free medical consultations in Sonora during its 2025 tour, marking a record for the program [250] - The company is actively engaging in social and environmental management programs in communities affected by the Los Chancas project [238] Tax and Financial Management - The effective income tax rate for the nine months ended September 30, 2025, was 36.4%, a slight decrease from 37.2% in the same period of 2024 [263] - Interest income increased by $57.6 million due to higher cash balances, partially offsetting a $30.4 million increase in interest expense [264] - The provision for income taxes for the first nine months of 2025 was $1,728.4 million, with an effective tax rate of 36.4%, down from 37.2% in 2024 [263] Dividends and Shareholder Returns - The company declared a quarterly cash dividend of $0.90 per share, payable on November 28, 2025 [285] - The Board of Directors authorized a quarterly cash dividend of $0.90 per share and a stock dividend of 0.0085 shares per share, payable on November 28, 2025 [285]

Core Insights - Southern Copper Corporation (SCCO) stock has surged by 57% year-to-date, driven by increased revenue, margin improvements, and a rising P/E multiple, indicating renewed investor confidence [2][3] Revenue and Earnings Performance - Revenue increased by 9.2%, with Q1 2025 sales rising by 20.1% to $3.12 billion and Q3 revenues up by 15.2% to $3.38 billion [3][8] - Net margin improved by 8.4% [3] - Earnings per share (EPS) for Q3 was reported at $1.35 [8] Copper Price and Market Dynamics - Copper prices have surged over 27% year-to-date, reaching record levels above $11,200 per metric ton due to limited supply [8] Project Developments - The Tia Maria project is 23% complete as of October 2025, with an exploitation license granted and production expected by 2027 [8] Cost Efficiency and By-product Growth - Operating cash cost, excluding by-products, decreased to $0.42 per pound in Q3 2025, reflecting a year-over-year decrease of 44.7% [8] - By-product production saw significant increases: zinc by 46.3%, silver by 16.4%, and molybdenum by 8.3% in Q3 2025, contributing to revenue growth [8]

Core Insights - The analysis of Southern Copper Corporation (SCCO) indicates a cautious stance due to its high valuation, which appears to reflect an expectation of perfection in performance [1]. Company Overview - Southern Copper Corporation is recognized as an excellent company, but its share price was around $118 at the end of September, leading to concerns about its valuation [1]. Analyst Background - The analyst is an economist and independent investor based in Argentina, currently pursuing a Ph.D. in Economics, which provides a unique perspective on complex and dynamic markets [1]. - The investment philosophy focuses on identifying long-term opportunities in underfollowed or undervalued companies, as well as established leaders with emerging structural value [1].