Nexa Resources (NEXA) Stock Forecast & Price Target

Nexa Resources SA has demonstrated impressive operational efficiency, reporting cash costs of only ($0.11/lb), outperforming prior forecasts, while enhancing its average C1 cash cost guidance to a range of ($0.04)-$0.16/lb. Despite experiencing an increase in COGS by 9% to $500 million, the company is making strides in improving its cost structure, as evidenced by the lowered cash cost guidance attributed to reduced contributions from specific mining operations. Furthermore, Nexa achieved a positive free cash flow of $13 million, signaling a potential turnaround from a challenging first half of the year characterized by negative free cash flow.

Nexa Resources SA has seen a deterioration in its net debt to T12 EBITDA ratio, now at 2.3x, indicating increasing financial leverage that raises concerns regarding the company's ability to manage its debt load effectively. Additionally, zinc output for the period was reported at 74kt, which, while reflecting a 9% quarter-over-quarter increase, showcased an 11% year-over-year decline and fell short of forecasts by 3%. Furthermore, the company's revised EBITDA estimates for 2025 to 2027 have decreased by an average of 4% per annum, highlighting potential challenges in maintaining revenue growth and profitability.