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Ero Copper (TSE:ERO)
TSX:ERO
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Ero Copper
(TSX:ERO)
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Rating:67Neutral
Price Target:
C$41.00
▲(10.22% Upside)
Action:ReiteratedDate:03/07/26
The score is driven primarily by improved financial results and balance-sheet trajectory alongside positive operational guidance and deleveraging progress from the latest earnings call. These strengths are tempered by weak near-term technical positioning (price below key short-term averages) and ongoing cyclicality/cost-pressure risks that show up in earnings and cash-flow variability.
Positive Factors
Sustained Production Growth
Material and repeatable production gains increase the company’s revenue base and operating scale. Durable higher throughput supports lower unit costs, improves operating leverage, and provides a stronger foundation for multi-year growth plans and project financing versus peers with weaker production visibility.
Improving Leverage / Deleveraging
A demonstrable reduction in leverage enhances financial flexibility and lowers refinancing and liquidity risk over the medium term. Sustained deleveraging supports capacity to fund capital projects, absorb commodity cycles and maintain investment-grade access to credit during downturns.
Improved Cash Generation
A return to positive free cash flow after multi-year outflows signals stronger cash conversion and self-funding capacity. Durable FCF supports ongoing capex, debt paydown and project funding without constant external equity, reducing dilution risk and strengthening long-term balance sheet resilience.
Negative Factors
Earnings Volatility / Commodity Sensitivity
Significant year-to-year swings reflect sensitivity to copper and by-product prices plus operational variability. This cyclicality raises forecasting risk, can stress liquidity during down cycles, and makes long-term planning and consistent returns more challenging for investors and lenders.
Operating Cost Pressures in Brazil
Persistent labor and contractor inflation in the operating jurisdiction is a structural margin headwind. Higher sustained operating costs erode cash margins, require ongoing efficiency gains to offset, and increase the company’s exposure to local inflation dynamics versus peers in lower-inflation jurisdictions.
High Capital-Expenditure Demands
Large multi-year capex commitments to debottlenecking, shafts and exploration keep cash needs high and limit free cash flow uplift. This reinvestment intensity increases funding needs and sensitivity to commodity cycles, constraining returns unless production and margins sustainably improve.
Ero Copper (ERO) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$3.88B
Dividend YieldN/A
Average Volume (3M)603.10K
Price to Earnings (P/E)10.9
Beta (1Y)1.98
Revenue Growth29.97%
EPS Growth658.38%
CountryCA
Employees3,690
SectorBasic Materials
Sector Strength58
IndustryCopper
Share Statistics
EPS (TTM)1.41
Shares Outstanding104,276,470
10 Day Avg. Volume452,312
30 Day Avg. Volume603,097
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)3.14
Price to Sales (P/S)3.67
P/FCF Ratio32.14
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$48.45Price Target Upside30.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)4.36
Revenue Forecast (FY)C$1.22B
Ero Copper Business Overview & Revenue Model
Company DescriptionEro Copper Corp., a base metals mining company, engages in the exploration, development, and production of mining projects in Brazil. It engages in the production and sale of copper concentrate from the MCSA Mining Complex located within the Curaçá Valley, northeastern Bahia state, as well as gold and silver byproducts. The company also holds a 100% interest in the Boa Esperança property, a copper development project located within southeastern Pará state; and NX Gold property located in Mato Grosso state. Ero Copper Corp. was incorporated in 2016 and is headquartered in Vancouver, Canada.
How the Company Makes MoneyEro Copper generates revenue primarily through the sale of copper concentrate produced from its mining operations. The company operates on a revenue model that includes the extraction and processing of copper ore, which is then sold to smelters and other industrial customers. Key revenue streams include the sale of copper, as well as by-products such as gold and silver. Ero Copper benefits from strategic partnerships with industry players and established relationships with customers, which help secure long-term contracts and pricing agreements. Additionally, the company may experience fluctuations in revenue based on copper market prices and demand dynamics, influenced by global economic conditions and industry trends.
Ero Copper Earnings Call Summary
Earnings Call Date:Nov 04, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
The earnings call highlighted strong operational performance across all segments, particularly with record production in October and successful initiatives at Xavantina. Despite increased operating costs and inflationary pressures in Brazil, the company's strategic improvements and financial results indicate a positive trajectory.Q3-2025 Updates
Positive Updates
Xavantina Gold Concentrate Sales Initiative
Ero Copper announced a maiden inferred resource at Xavantina of 24,000 tonnes grading 37 grams per tonne, containing 29,000 ounces of gold. The company expects to sell between 10,000 and 15,000 tonnes of concentrate in Q4 2025, significantly accelerating the deleveraging of the business.
Record Monthly Production in October
All operations achieved all-time historic monthly records in October 2025, with Caraíba achieving a record mine tonnage and Xavantina producing nearly 7,000 ounces of gold, excluding new concentrate sales.
Tucumã Production Growth
Tucumã showed a new monthly record in October with approximately 3,300 tonnes of copper produced, following a sequential quarterly growth of nearly 20%.
Financial Performance and Deleveraging
Revenue increased to $177 million in Q3, with adjusted EBITDA at $77.1 million. The company continued to deleverage, reducing the net debt leverage ratio from 2.1x in Q2 to 1.9x in Q3.
Negative Updates
Increased Operating Costs
Operating costs rose due to lower mined and processed grades at Caraíba and changes in accounting treatment at Tucumã, impacting EBITDA.
Cost Pressures in Brazil
Ero Copper faced significant labor and contractor inflation in Brazil, affecting operational costs.
Company Guidance
In the recent conference call, Ero Copper provided detailed guidance on their operations and financial expectations for the remainder of 2025. They announced the maiden inferred resource at Xavantina, consisting of 24,000 tonnes grading approximately 37 grams per tonne, equivalent to 29,000 ounces of gold, with plans to sell between 10,000 and 15,000 tonnes of concentrate in Q4 at an operating cost of $300 to $500 per ounce. The company aims to achieve 90% to 95% payability, significantly enhancing their deleveraging efforts. For Q4, Ero Copper expects to achieve the lower end of their annual production guidance, with Caraíba and Tucumã operations setting all-time monthly records in October. Caraíba exceeded 400,000 tonnes of mill throughput, and Tucumã produced approximately 3,300 tonnes of copper in October. Xavantina saw nearly 7,000 ounces of gold production in October, excluding the new concentrate sales. They anticipate stronger production and financial performance continuing through Q4. Additionally, the company reported a 24% increase in copper concentrate sales at Tucumã in Q3, driving revenues to $177 million, with adjusted EBITDA at $77.1 million and a net income of $27.9 million. Their liquidity position was $111 million at quarter-end, and they are actively reducing net debt, which improved their leverage ratio to 1.9x.Ero Copper Financial Statement Overview
Summary
Strong 2025 rebound in profitability and growth (sharp revenue increase, strong margins) with improving leverage, but offsets include historically volatile earnings (notably the 2024 loss) and uneven cash conversion/free-cash-flow consistency despite a return to positive FCF in 2025.Income Statement
Profitability and growth improved meaningfully in the latest annual period (2025): revenue rose sharply (about +36% YoY) and margins expanded to strong levels (gross margin ~43%, net margin ~34%). This is a clear rebound from 2024, which showed a net loss and weak profitability. The main weakness is earnings consistency—results have swung materially across years (notably the 2024 loss versus solid profits in 2023 and 2025), which adds cyclicality/execution risk typical for a copper producer.78
Positive
Balance Sheet
The balance sheet looks healthier than last year: equity increased and leverage moderated, with debt-to-equity improving from ~1.06 (2024) to ~0.68 (2025). Returns on equity also rebounded strongly in 2025. However, absolute debt remains sizable, and leverage has moved around over time (very low in 2021, higher in 2022–2024), indicating the company may be more sensitive to commodity prices and capital needs than a consistently low-leverage peer.64
Positive
Cash Flow
Cash generation improved significantly in 2025, with operating cash flow rising strongly and turning free cash flow positive (~$91M) after large outflows in 2022–2024. That said, free cash flow remains modest relative to reported earnings in 2025 (free cash flow was only about a quarter of net income), and the multi-year pattern includes several years of negative free cash flow, suggesting ongoing reinvestment intensity and potential volatility in cash conversion.58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 799.60M | 470.26M | 427.48M | 426.39M | 489.92M |
| Gross Profit | 345.51M | 180.55M | 156.84M | 187.18M | 318.86M |
| EBITDA | 410.40M | 13.78M | 208.15M | 206.48M | 289.80M |
| Net Income | 268.34M | -68.47M | 92.80M | 101.83M | 201.05M |
Balance Sheet | |||||
| Total Assets | 1.92B | 1.46B | 1.51B | 1.19B | 689.76M |
| Cash, Cash Equivalents and Short-Term Investments | 105.25M | 50.40M | 111.74M | 317.40M | 130.13M |
| Total Debt | 631.20M | 620.07M | 445.84M | 429.02M | 66.36M |
| Total Liabilities | 984.22M | 866.95M | 702.36M | 645.91M | 294.27M |
| Stockholders Equity | 933.83M | 587.13M | 804.25M | 538.59M | 393.06M |
Cash Flow | |||||
| Free Cash Flow | 91.22M | -192.17M | -297.55M | -152.43M | 182.76M |
| Operating Cash Flow | 358.57M | 145.42M | 163.10M | 143.39M | 364.59M |
| Investing Cash Flow | -283.47M | -335.38M | -308.17M | -425.81M | -179.53M |
| Financing Cash Flow | -17.29M | 131.16M | 77.75M | 327.30M | -115.43M |
Ero Copper Technical Analysis
Negative
37.20
Price Trends
42.84
Negative
37.71
Negative
29.99
Positive
Market Momentum
-1.36
Positive
37.07
Neutral
20.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ERO, the sentiment is Negative. The current price of 37.2 is below the 20-day moving average (MA) of 41.78, below the 50-day MA of 42.84, and above the 200-day MA of 29.99, indicating a neutral trend. The MACD of -1.36 indicates Positive momentum. The RSI at 37.07 is Neutral, neither overbought nor oversold. The STOCH value of 20.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ERO.
Ero Copper Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$30.62B | 14.08 | 21.95% | 0.68% | -19.68% | -90.05% | |
70 Outperform | C$11.80B | 13.57 | 19.30% | 0.07% | 5.40% | 413.48% | |
67 Neutral | C$3.88B | 10.93 | 31.58% | ― | 29.97% | 658.38% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | C$3.48B | 152.81 | -5.02% | ― | 1.17% | -169.37% | |
59 Neutral | $8.71B | 23.80 | 9.77% | ― | 44.69% | 1216.12% | |
51 Neutral | C$28.25B | -796.52 | 0.41% | ― | 8.17% | ― |
* Basic Materials Sector Average
TSE:ERO
Ero Copper
35.86
17.75
98.01%
TSE:HBM
Hudbay Minerals
28.42
17.36
156.99%
TSE:TKO
Taseko Mines
9.04
5.68
169.05%
TSE:LUN
Lundin Mining
34.42
21.79
172.53%
TSE:CS
Capstone Copper
11.09
3.15
39.67%
TSE:FM
First Quantum Minerals
32.43
11.40
54.21%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.