Hold Rating on Nexa Resources SA Amid Potential Acquisition of BHP’s Copper and Gold Assets

Carlos De Alba, an analyst from Morgan Stanley, maintained the Hold rating on Nexa Resources SA (NEXA – Research Report). The associated price target remains the same with $7.00.

Carlos De Alba has given his Hold rating due to a combination of factors related to Nexa Resources SA’s strategic positioning and potential transactions. The company is reportedly interested in acquiring BHP’s copper and gold assets in Brazil, including the Pedra Branca mine. This potential acquisition aligns with Nexa’s strategy to increase its exposure to copper, which could enhance its portfolio balance in base metals.
However, the estimated transaction size of $615 million could increase Nexa’s net leverage to 1.8x by 2026, which is consistent with its historical average. While this strategic move could be beneficial, the uncertainties surrounding the transaction and its impact on financial leverage contribute to the Hold rating. The lack of confirmation from Nexa and BHP regarding the sale adds another layer of uncertainty, prompting a cautious approach in the current assessment.