The case for & against
Bull & Bear analysis
Bullish
Nexa Resources S.A. (NYSE: NEXA) is a leading mining company headquartered in Brazil, with significant operations in Peru, focusing primarily on the extraction and processing of zinc, copper, silver, and lead. The company is strategically positioned to benefit from increasing demand for base metals driven by infrastructure development and industrial applications. With a vertically integrated business model that includes mining and smelting operations, Nexa emphasizes sustainability and operational excellence as key components of its long-term growth strategy.
Bull says
- ↑Q1 adjusted EBITDA $283M (+100% YoY), 32% margin.
- ↑Revenues $888M (+42% YoY) driven by higher zinc and copper prices.
- ↑Zinc production 79K t (+18% YoY) from improved ore grades.
- ↑Net leverage 1.59x and $842M cash buffer ensure financial flexibility.
- ↑Cerro Pasco integration and Masaranduba exploration support future output.
- ↑Strong growth and momentum factors suggest further stock gains.
Bear says
- ↓Rainfall at Cerro Lindo and Atacocha blockade disrupted output.
- ↓Negative profitability and earnings yield signal weak return potential.
- ↓Net debt/EBITDA rose to 2.1x, heightening leverage risk.
- ↓Unfavorable analyst revisions point to downward earnings forecasts.
- ↓Commodity price swings and low smelting TCs may pressure margins.
- ↓Poor dividend yield and negative revision factors may deter investors.
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Earnings Call · Q1 2026 · Mgmt. Guidance
Updated 05-10-2026neutral
Transcript signals
Bull points
- The first quarter of 2026 was a strong start to the year. Adjusted EBITDA more than double year over year to $283 million with a margin of nearly 32%. Net income was $118 million or $0.67 per share. And net leverage continued to come down, closing the quarter at 1.59 times, half a turn lower than where we were a year ago, benefited by a strong last 12 months adjusted EBITDA.
- Three things drove the results: a constructive price environment across our entire metal mix, most notably silver, where prices averaged 164% above the first quarter of 2025, higher sales volumes in both segments, and operating performance that continues to improve, particularly at Alipona, which delivered another quarterly production record.
- zinc metal and oxide sales total 147,000 tons, up year-over-year and quarter-over-quarter, supported by ongoing operations and improvements at our Brazilian smelters and continued solid performance at Cajamarquilla.
Bear points
- The quarter was not without challenges. heavy rainfall at Cerro Lindo, an illegal community blockade at Atacocha, and a shaft constraint at El Porvenir all impacted the Peruvian production sequentially.
- smelter margins remain compressed. Spot treatment charges in China, both domestic and imported, continue at historically low levels, which highlights how acute the concentrate shortage is. While keys melting byproducts such as sulfuric acid have provided some partial relief to margins, they have not been sufficient to fully offset the impact of lower TCs. Looking into 2026, we do not expect a material recovery in TCs, particularly given that the annual benchmark has been settled at $85 per tonne. As a result, smelter margins are likely to remain under pressure.
- smelter margins remain compressed. Spot treatment charges in China, both domestic and imported, continue at historically low levels, which highlights how acute the concentrate shortage is. While keys melting byproducts such as sulfuric acid have provided some partial relief to margins, they have not been sufficient to fully offset the impact of lower TCs. Looking into 2026, we do not expect a material recovery in TCs, particularly given that the annual benchmark has been settled at $85 per tonne. As a result, smelter margins are likely to remain under pressure.
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