Sandfire Resources (ASX:SFR) Rallies 94%: Is This ASX Copper Stock Still Worth Buying?

Sandfire Resources: ASX Copper Stock to Watch in 2026

As the ASX begins its first full trading week of 2026, Sandfire Resources (ASX: SFR) has become a key test for the copper sector after its share price surged an impressive 94% in 2025. For investors watching the copper space, this momentum reflects a company that delivered on multiple fronts: record production, dramatic debt reduction, and a strategic push into South Australia’s emerging copper province. The question now is whether the stock’s stretched valuation leaves room for further gains or if the easy money has already been made.

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Sandfire Delivers Operational Momentum Across Three Continents

The foundation of Sandfire’s rally lies in its FY25 operational turnaround. The company delivered record copper equivalent production of 152,400 tonnes, up 12% from the prior year, demonstrating that its Spanish and Botswanan mines have hit their stride.

What stands out most is the cost discipline. Both MATSA in Spain and Motheo in Botswana delivered roughly 20% reductions in operating costs, bringing them comfortably into the lower half of the global cost curve. This isn’t just about cutting corners; it reflects genuine operational leverage as production scales towards optimal capacity.

The balance sheet transformation has been equally impressive. Sandfire slashed net debt by 69% during FY25, shifting from a heavily leveraged position to a comfortable net debt of just US$123 million. The implication here is clear: management now has the flexibility to pursue growth without diluting shareholders or taking on risky debt levels.

Kalkaroo Acquisition Signals Confidence in Australian Copper Growth

Following the November 2025 announcement, Sandfire and partner Havilah Resources recently extended the transaction timetable, with a shareholder meeting now scheduled for mid-February 2026. This signals management’s confidence in replicating its successful Kalahari Copper Belt strategy closer to home.

Kalkaroo isn’t a speculative punt. It’s one of Australia’s largest undeveloped copper-gold deposits, with a 100 million tonne ore reserve already defined. The staged deal structure, with payments tied to completing a pre-feasibility study, suggests careful capital allocation rather than reckless expansion. CEO Brendan Harris described the move as “fully aligned with our strategy,” pointing to ready access to infrastructure and skilled labour from Adelaide and Broken Hill.
If the PFS, expected within 18 to 24 months, confirms the project’s economics and expands the resource, this could become Sandfire’s next major growth engine.

The Investor’s Takeaway

Here’s where things get tricky. The operational story is compelling, but the stock’s valuation already prices in considerable future success.
Sandfire trades at nearly 60 times (59.6x) trailing earnings, more than double the peer average of around 22 times. This premium suggests the market expects very strong growth ahead. Analyst price targets tell a more cautious story, with the consensus sitting below the current share price and implying modest downside from here.

Copper fundamentals remain supportive long-term, driven by AI data centres, electric vehicles, and grid infrastructure. Since Sandfire’s earnings are heavily tied to copper prices, any softness would pressure the stock. Another consideration: Sandfire hasn’t paid a dividend since March 2022, so income-focused investors won’t find immediate appeal.

Our take: Sandfire has executed brilliantly, and the long-term copper story remains intact. However, at current valuations, we believe much of the near-term upside is already baked in. For investors without a position, waiting for a pullback may offer a better entry point. Existing shareholders should weigh their risk tolerance; trimming after a 94% rally isn’t unreasonable. Patient investors betting on Kalkaroo and continued execution may choose to hold for the next leg higher.