Deutsche Bank is out with a groovy downgrade on Southern Copper (NYSE:PCU) to Sell from Hold. According to the firm, the downgrade is based mainly on valuation and the stock's impressive rally - PCU has gained 70% in 6 trading days since hitting a low of US$9.84/share on October 27th compared with a gain of 18% for the S&P500 (and a 39% rally for competitor Freeport-McMoRan and a 14% move in LME copper prices). DB's Price Target of US$10/share continues to be based on 9x 2009E EPS of US$1.08 and, with PCU's stock at US$16.77/share, PCU trades at a rich 2009E PE of 15.5x, or ~2x the multiple of its peer group (7.3x).

Notablecalls: PCU has had a nice run since that Actionable call from Citigroup last week. I feel the stock needs a breather and DB's downgrade will bring just that. I see it coming back towards sub-$15 level in the n-t.