- Southern Copper (SCCO -0.5%) is initiated with a Hold rating and a $32 price target at Brean Capital, which believes SCCO's significantly richer valuation than peers is justified by a deep bench of opportunities and strong balance sheet from which to pursue them.
- As SCCO pursues its aggressive expansion program, the firm projects the majority of the company's capex budget - currently $4.3B through 2017 - will be funded by cash from operations, with only a modest temporary increase in leverage in 2015.
- On the whole, Brean believes SCCO is one of the better positioned names to not only weather the cyclical downturn in commodity pricing, but also to expand and execute growth opportunities ahead of and during a market recovery.