Goldman Sachs expects divergent 2Q26 earnings among Americas copper miners, but stronger operating performance in 2H26.

Overview

This report presents Goldman Sachs' 2Q26 earnings preview and valuation update for its covered Americas copper mining companies. The core view is that quarterly earnings will diverge, but most companies' operating performance will improve in 2H26. The report covers Capstone Copper, Ero Copper, First Quantum Minerals, HudBay Minerals, Grupo Mexico, and Southern Copper, focusing on production, sales, cash costs, hedging losses, grade changes, expansion-project progress, commodity price curves, and target-price revisions.

Core views

Goldman Sachs believes Southern Copper and Grupo Mexico will be the most resilient companies in 2Q26, supported by low net cash costs, the COMEX copper price premium, stable production, and by-products. First Quantum is the weakest near-term name, primarily affected by $170M in hedging losses, fuel costs, appreciation of the Zambian kwacha, and sales below production due to port congestion. Earnings for Capstone, Ero, HudBay, and First Quantum are expected to improve in 2H26, mainly due to higher grades, the completion of maintenance, restored operating leverage, easing cost pressures, and project ramp-ups.

Analysis framework

The report uses a bottom-up company earnings preview framework, with 2Q26 EBITDA, production, sales, C1 cash cost, consensus variance, and sequential/year-over-year changes as core variables. It also incorporates the updated copper and gold price curves from the Goldman Sachs Commodities team to revise FY26-FY28 earnings forecasts and 12-month target prices. Valuation methodologies vary by company and include DCF, one-year forward EV/EBITDA multiples, historical mean plus standard deviation, and SOTP.

Methodology notes

• Earnings forecasts2Q26 EBITDA preview

  Estimating quarterly EBITDA, production, sales, costs, and consensus variance by company

  Goldman Sachs measures near-term earnings strength using expected 2Q26 EBITDA, sequential and year-over-year changes, and deviations from consensus, while using the 2H26 EBITDA outlook to assess the extent of improvement in the second half.

• Commodity price assumptionsGS Commodities price curve

  Updated price curve with higher copper prices and lower gold prices

  The report uses a new copper price curve: average prices of $13,650/t, $13,800/t, and $13,700/t for 2H26/2027/2028, up 9%/14%/13% from previous assumptions; it also adopts lower gold-price assumptions based on the futures curve.

• Valuation methodsDCF/EV/EBITDA blended valuation

  Equal-weighted blend of DCF and one-year forward EV/EBITDA target multiples

  Ero, HudBay, Capstone, and Southern Copper, among others, use blended valuations based on DCF and target EV/EBITDA multiples, incorporating adjustments for beta, WACC, capital structure, and historical multiples.

• Valuation methodsSOTP

  Sum-of-the-parts valuation

  Grupo Mexico's target price uses SOTP, primarily comprising the equity value of SCCO, the privatization price of GMXT, the ASARCO multiple, the infrastructure-business multiple, and a holding-company discount.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Capstone Copper

  Covered company, rated Neutral, target price C$15/sh

  Strengths

  Expected to benefit in 2H26 from improved Mantoverde grades, higher throughput, and easing cost pressures; high operating leverage at higher copper prices.

  Weaknesses

  2Q26 performance is weighed down by sulfuric acid prices, costs in the oxide-ore business, and a one-off impact from the labor agreement at Mantos Blancos.

  Comparison

  Less resilient than SCCO/GMEX, but the potential for second-half improvement is relatively clear.

  Risks

  Production guidance for Pinto Valley and the Mantoverde heap leach operation is at risk; a slower MVO ramp-up and capital-expenditure overruns also pose downside risks.

• Ero Copper

  Covered company, rated Neutral, target price $33/sh

  Strengths

  Improvement in 2Q26 versus 1Q26, higher Tucumã throughput, and improved gold grades and concentrate sales at Xavantina; EBITDA is expected to continue increasing in 2H26.

  Weaknesses

  Caraíba and Tucumã are affected by BRL appreciation, fuel costs, and grade changes; full-year costs may approach or exceed the upper half of guidance.

  Comparison

  Near-term performance is recovering from 1Q26, but remains below consensus and carries higher cost risk than larger miners.

  Risks

  Tucumã ramp-up and Caraíba operational recovery may fall short of expectations; copper or gold prices may also be below expectations.

• First Quantum Minerals

  Covered company, rated Buy, target price C$48/sh

  Strengths

  2H26 could benefit from improved Kansanshi grades, Stage 2 mining, easing cost pressures, the fading of hedging losses, and shipments from Cobre Panama inventory.

  Weaknesses

  2Q26 is expected to be among the weakest in the coverage universe, weighed down by $170M in hedging losses, fuel costs, appreciation of the Zambian kwacha, and sales lagging production because of port congestion.

  Comparison

  Near-term earnings are weaker than those of SCCO/GMEX, but Goldman Sachs maintains a Buy rating, reflecting a positive bias toward second-half recovery and potential valuation re-rating.

  Risks

  Concentration in Zambian assets, a longer-than-expected resolution for Cobre Panama, lower copper prices, and lower-than-expected economics of a Cobre Panama restart.

• HudBay Minerals

  Covered company, rated Buy, target price C$37/sh

  Strengths

  2H26 is expected to benefit from improved gold grades at Manitoba, recovery in throughput in Peru and British Columbia, and lower costs; 2Q26 EBITDA is slightly above consensus.

  Weaknesses

  2Q26 copper and gold sales are expected to decline sequentially, while lower by-product credits, raw-material costs, and operating deleveraging raise C1 cash costs.

  Comparison

  Consensus variance is better than First Quantum's, but the target price was lowered, indicating valuation pressure from lower gold-price assumptions and higher costs.

  Risks

  Copper Mountain costs and free cash flow, Peru throughput ramp-up, sustained Manitoba gold production, Copper World permitting or capital expenditures, social unrest in Peru, and wildfires in Manitoba.

• Grupo Mexico

  Covered company, rated Buy, target price MXN228/sh

  Strengths

  2Q26 EBITDA is expected to be strong, with the mining segment supported by stable SCCO production and sequential growth at Asarco; GMXT freight volumes are increasing, while the infrastructure business continues to contribute steadily.

  Weaknesses

  Overall valuation is affected by the holding-company discount, capital allocation, and the regulatory environment.

  Comparison

  Alongside SCCO, it is among the most resilient names in the report, while its Buy rating is higher than SCCO's Neutral rating.

  Risks

  Copper prices below expectations, non-core capital allocation reducing marginal returns, a slower-than-expected recovery in the PEMSA infrastructure business, and political and regulatory risks in Mexico and Peru.

• Southern Copper

  Covered company, rated Neutral, target price US$186/sh

  Strengths

  Low net cash costs, the COMEX premium, production resilience, and by-product prices support 2Q26 earnings.

  Weaknesses

  2H26 EBITDA is expected to decline because of a modest decrease in copper production, weaker volumes and prices for zinc and molybdenum by-products, and higher C1 cash costs.

  Comparison

  One of the most resilient names in the near term, but it remains rated Neutral, suggesting that valuation or medium-term incremental upside may already be substantially reflected.

  Risks

  Copper and by-product prices below expectations, weaker-than-expected cost control, and slower-than-expected project ramp-ups.

Key data

• Capstone Copper 2Q26 EBITDA$313MExpected to decline 5% q/q and increase 45% y/y, 8% below consensus; target price raised to C$15/sh, with a Neutral rating maintained.
• Ero Copper 2Q26 EBITDA$143MExpected to increase 15% q/q and 73% y/y, 6% below consensus; target price raised to $33/sh, with a Neutral rating maintained.
• First Quantum Minerals 2Q26 adjusted EBITDA$317MExpected to decline 3% q/q and 21% y/y, 18% below consensus; excluding one-off hedging losses, EBITDA would be $487M; target price raised to C$48/sh, with a Buy rating maintained.
• HudBay Minerals 2Q26 adjusted EBITDA$326MExpected to decline 23% q/q and increase 33% y/y, 2% above consensus; target price lowered to C$37/sh, with a Buy rating maintained.
• Grupo Mexico 2Q26 adjusted EBITDA$3.5BExpected to increase 5% q/q and 47% y/y, 1% below consensus; Buy rating and MXN228/sh target price maintained.
• Southern Copper 2Q26 adjusted EBITDA$2.8BExpected to increase 4% q/q and 57% y/y, 2% below consensus; target price raised to US$186/sh, with a Neutral rating maintained.
• First Quantum hedging-loss impact$170M2Q26 EBITDA is affected by copper/gold hedging losses; the related programs are expected to end completely after Jun-2026.
• Southern Copper COMEX premiumApproximately $400/tApproximately 40% of SCCO's sales are linked to COMEX pricing, which the report believes will support realized prices.

Impact & implications

The report's core investment implication is that investors should not focus solely on divergent one-quarter 2Q26 earnings, but should instead monitor whether the operational recovery in 2H26 materializes. Buy ratings are concentrated in First Quantum, HudBay, and Grupo Mexico, reflecting Goldman Sachs' greater emphasis on medium-term copper prices, operating leverage, and potential for valuation re-rating; Neutral ratings are concentrated in Capstone, Ero, and Southern Copper due to cost pressures, project-ramp uncertainty, or the fact that substantial resilience is already reflected in valuations.

Risks

• Fuel prices, local-currency appreciation, and higher raw-material prices could continue to drive up cash costs.
• Lower by-product prices or volumes would reduce credits from gold, silver, molybdenum, and other by-products, raising net cash costs.
• If grade improvements, the completion of maintenance, and expansion-project ramp-ups are delayed, the 2H26 earnings improvement could fall short of expectations.
• Copper prices below the assumptions of the Goldman Sachs Commodities team would compress earnings and valuation multiples.
• Port congestion, sales below production, and uncertainty around Cobre Panama remain key risks for First Quantum.
• Political, regulatory, energy, and social risks in Mexico, Peru, Chile, Zambia, and Panama could affect production, costs, or project approvals.

What to watch

• Differences between each company's actual 2Q26 EBITDA and Goldman Sachs' forecasts and market consensus.
• Capstone's Mantoverde performance, MVO debottlenecking, and Pinto Valley production-guidance risks.
• Ero's Tucumã ramp-up, the pace of entering higher-grade areas at Caraíba, and the impact of the BRL exchange rate.
• First Quantum's exit from its hedging book after Jun-2026, the Zambian kwacha, port congestion, and shipments from Cobre Panama inventory.
• HudBay's Manitoba gold grades, the Peru pebble crusher, throughput recovery in British Columbia, and by-product credits.
• The sustainability of Southern Copper's COMEX premium, molybdenum and silver by-product prices, and changes in 2H26 C1 cash costs.
• Grupo Mexico's SCCO contribution, GMXT freight volumes, ASARCO performance, and infrastructure-business costs.