Grupo Mexico & Southern Copper: Model Update

Research evidence excerpt

Grupo Mexico & Southern Copper: Model Update

Rodolfo Angele, CFA AC Latin America Equity Research

(55-11) 4950-3888 16 June 2026 J P M O R G A N

rodolfo.r.angele@jpmorgan.com

Investment Thesis, Valuation and Risks

Grupo Mexico (Neutral; Price Target: Ps183.00)

Investment Thesis

We rate GMex Neutral. Our Neutral rating is based on the recent stock rally – Gmex's stock

has increased around 31% in the last 3 months, and we now see the stock as fairly valued.

Additionally, our Commodities team expects copper prices to decrease from the current

$12,780/mt to $12,000/mt in the next couple of months. Given the stock's high correlation

with copper prices, we expect a downward revision to stock prices. We see the stock trading

at 7.3x EV/EBITDA 2026e with a PT of Ps183.0/sh, which represents 13% downside

potential to market prices.

Valuation

We base our price target for Grupo Mexico shares on an SOTP analysis, which includes

Grupo Mexico’s stake in Southern Copper (89%), GMXT (70%), and their full stake in the

Infrastructure and Asarco divisions. As for GMXT, Infrastructure and Asarco, we use public

information provided by Grupo Mexico to estimate the equity value. To adjust the NAV

derived from the SOTP, we apply a holding company discount of 25%. Our Dec 2026 price

target is Ps183.0/sh.

Risks to Rating and Price Target

• GMXT: Higher exposure to Mexico and Peru. The discount to NAV to SCCO could

be a reflection of investors’ risk aversion to Mexico and Peru (thus justifying the higher

discount), and we may not see the discount returning to historical levels. On the other

hand, if we have any macro changes in either of the countries we could see discounts

improving.

• Commodity prices. Another risk to our base case is volatility in commodity prices.