BMO Capital analyst Matt Murphy maintained a Buy rating on Ero Copper yesterday and set a price target of C$27.00.
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Matt Murphy has given his Buy rating due to a combination of factors that highlight Ero Copper’s promising future. The recent declaration of commercial production at the Tucuma mine is a significant milestone, indicating a substantial increase in copper production and free cash flow. This development is expected to drive a step-change in the company’s financial performance, with the potential for high profitability due to the mine’s high grades and low strip ratio.
Furthermore, the company’s ability to generate over $50 million in free cash flow per quarter positions it well for rapid debt reduction and strategic investments in growth projects, such as the Pilar shaft project and exploration at the Furnas JV with Vale. The increase in the target price to C$27 reflects a more optimistic outlook, supported by improved valuation multiples. Overall, Ero Copper offers attractive exposure to copper growth and operational improvements at a discounted valuation, making it a compelling investment opportunity.
In another report released on June 30, Raymond James also initiated coverage with a Buy rating on the stock with a C$28.00 price target.