Southern Copper (SCCO) is one of the stocks that Zacks.com visitors have been watching recently. Therefore, it may be a good idea to review some of the factors that may affect the near-term performance of a stock.

Over the past month, the miner’s shares have returned -10%, compared to a -2.4% change for the Zacks S&P 500 Composite. During that period, the Zacks Mining – Nonferrous industry, which includes Southern Copper, has lost 11.3 percent. Now the important question is: What could be the future direction of the stock?

Although media reports or rumors about a significant change in a company’s business prospects usually cause its stock to trend and cause immediate price changes, there are always some underlying factors that ultimately drive buy and hold decisions. Let’s move on.

Here at Zacks, we prefer to gauge the change in a company’s future earnings estimates over anything else. This is because we believe that the present value of his future earnings determines the fair value of his stock.

Our analysis is primarily based on how sell-side analysts covering the stock are revising their earnings estimates keeping in mind the latest business trends. When a company’s earnings estimates increase, the fair value of its stock also increases. And when a stock’s fair value is higher than its current market value, investors buy the stock, causing its price to move upward. Because of this, empirical studies indicate a strong correlation between earnings estimate revisions and trends in short-term stock price movements.

For the current quarter, Southern Copper is expected to post earnings per share of $1.06, indicating a change of +86% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.8% over the past 30 days.

The consensus earnings estimate of $4.45 for the current fiscal year indicates a year-over-year change of +43.1%. This estimate has changed by +0.9% over the past 30 days.

For the next fiscal year, the consensus earnings estimate of $4.61 points to a +3.5% change from what Southern Copper is expected to report a year ago. Over the past month, estimates have changed by +0.9%.

With a strong externally audited track record, our proprietary stock rating tool, ZacksRank, provides a more definitive picture of near-term stock price direction, as it effectively harnesses the power of revisions to earnings estimates. does Due to the size of the recent change in consensus estimates, along with three other factors related to earnings estimates, Southern Copper is assigned a Zacks Rank #3 (Hold).



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