Nexa Resources S.A. NEXA stock has rocketed 164.2% in a year, outperforming the Zacks Mining - Miscellaneous industry’s 42.8% jump. Meanwhile, the Basic Materials sector has risen 27.6%, and the S&P 500 has rallied 25.2%.
The company also outperformed its peers like Hudbay Minerals Inc. HBM and Anglo American plc. NGLOY, which have soared 114.4 and 73.9%, respectively, in the same time frame.
With the NEXA stock riding high, investors may rush to add it to their portfolio. However, before making a decision, it will be prudent to take a look at the reasons behind the surge, the company’s growth prospects and risks (if any) in investing.
NEXA Posts Strong Q1 Results
Nexa Resources’ adjusted EBITDA surged 126% year over year in the first quarter of 2026 to $283 million. The increase was driven by a constructive price environment, higher sales volumes in both segments and improving operating performance. An 18% year-over-year increase in zinc production, record quarterly production at the Aripuanã mine, and ongoing operational improvements at Brazilian smelters pushed first-quarter revenues to $888 million, marking a 42% year-over-year increase.
Nexa Resources’ Upbeat Zinc Outlook
Earlier this month, the company announced that it is gradually resuming production at its Cajamarquilla smelter in Peru, which was temporarily suspended following a fire on May 13. Nexa Resources expects a production impact of 7,000 tons of refined zinc, indicating 2% of annual production due to the temporary production halt at Cajamarquilla. However, the company expects to recover the lost production in the second half of 2026.
Prior to the incident at Cajamarquilla, the company expected consolidated zinc production to increase 6% from 2025. The increase will be driven by increased output at Aripuanã, Atacocha, and Vazante mines. The company expects zinc production to increase 8% in 2027 from the 2026 level. 2028 zinc production is expected to be flat as higher production from Atacocha, Aripuanã and Vazante mines will be offset by lower contributions from Cerro Lindo and El Porvenir.
NEXA’s Long-term Growth Remains Solid
Nexa Resources is focused on optimizing its portfolio to concentrate its efforts on its core operations. In sync with this, the company completed the divestment of its Otavi and Namibia North project in late 2025. Nexa Resources is prioritizing profitable assets, boosting free cash flow and sticking to its disciplined capital allocation strategy. The company continues to assess opportunities in its portfolio, with Namibia being a key region for expanding copper exploration beyond Latin America.
The company is also moving forward with its investment strategy, with capital expenditure expected at $381 million for 2026. The company expects a 17% year-over-year increase in 2026 for its mine development investments to support operational flexibility, performance improvements and life-of-mine extensions, mainly at the Aripuanã and Vazante mines.
Nexa Resources is executing its long-term strategy to replace and expand its mineral reserves and resources. In sync with that, the company is moving forward with its disciplined exploration program focused on identifying new orebodies and upgrading resource classifications through infill drilling campaigns. The efforts have already extended current life-of-mine plans across its portfolio, pushing Aripuanã’s life to 2041 and El Porvenir to 2036. The company plans to invest an additional $68 million in exploration, with a $49-million investment in mineral exploration across both greenfield and brownfield sites.
NEXA is currently executing Phase I of its Cerro Pasco Integration Project, which is an operational initiative to physically link El Porvenir and Atacocha underground mines. The integration will extend the life of mine at the Cerro Pasco Complex more than 15 years while boosting the operating cash flow.
NEXA is also gaining from a strong pricing environment, with copper prices rising 9.5% year over year. Zinc gained 31.4%, while silver and gold rose 25.5% and 65.6%, respectively. Lead prices, however, declined a slight 8%. Along with NEXA, the rise in metal prices is also aiding Hudbay Minerals and Anglo American.
On Thursday, Nexa Resources confirmed that Votorantim S.A. is in active discussions with Boliden AB to sell its 64.7% stake in the company. However, no final deal is certain yet.
Nexa Resources’s Estimates Indicate Y/Y Rise
The Zacks Consensus Estimate for NEXA’s 2026 sales is $3.44 billion, indicating a 14.5% year-over-year jump. The consensus mark for the year’s earnings is pegged at $2.81 per share, suggesting a year-over-year upsurge of 230%.
The Zacks Consensus Estimate for 2027 sales implies a 9% year-over-year dip. The same for earnings suggests a fall of 16.7%.
EPS estimates for 2026 have moved 35.1% north over the past 60 days and the same for 2027 has moved up 27.2% over the past 60 days.
NEXA’s Valuation Is Attractive
The Nexa Resources’ stock is currently trading at a forward 12-month earnings multiple of 5.14X, which is a discount to the industry average of 14.16X.
Meanwhile, Hudbay Minerals and Anglo American are trading higher at 12.65X and 19.48X, respectively.
Final Take on Nexa Resources’ Stock
NEXA is poised to benefit from the current increase in metal prices and higher production expectations. The company’s ongoing exploration and investment strategies will further aid growth.
With an appealing valuation and upward earnings estimate revisions, now appears to be a favorable time to consider adding the stock to your portfolio. This is further supported by its Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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