Sell Rating on Nexa Resources SA Due to Financial Vulnerability and Earnings Discrepancy
Lawson Winder has issued a Sell rating on Nexa Resources SA due to financial vulnerabilities and earnings discrepancies. Despite exceeding Q3’25 adjusted EBITDA expectations, Nexa reported an adjusted loss per share significantly below forecasts, attributed to higher minority interest and adjustments. The company's balance sheet raises concerns, and the BofA Commodities Team's cautious outlook on zinc, along with Nexa's high net debt to EBITDA ratio, suggests challenges in meeting financial expectations and managing debt effectively.
Lawson Winder has given his Sell rating due to a combination of factors affecting Nexa Resources SA. Despite Nexa’s Q3’25 adjusted EBITDA exceeding expectations, the company reported an adjusted loss per share, which was significantly below forecasts. This discrepancy was attributed to higher minority interest and other adjustments, which negatively impacted the earnings.
Additionally, while Nexa maintained its 2025 production guidance, the company’s balance sheet remains a concern. The BofA Commodities Team holds a cautious outlook on zinc, which, coupled with Nexa’s relatively high net debt to EBITDA ratio compared to the sector average, suggests financial vulnerability. These factors contribute to the Sell rating as they indicate potential challenges for Nexa in meeting financial expectations and managing its debt effectively.
