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Ero Copper (TSE:ERO)
TSX:ERO
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Ero Copper
(TSX:ERO)
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Rating:69Neutral
Price Target:
C$55.00
▲(27.37% Upside)
TSE:ERO scores 69 בעיקר בזכות רווחיות חזקה ושיפור במינוף, יחד עם מסר חיובי מהשיחה (שיאי הפקה, תכניות לשיפור payability והמשך דה-לברג'ינג). מנגד, תזרים חופשי שלילי וחולשה בהמרת רווח למזומן מגבילים את הציון, ובטווח הקצר האינדיקטורים הטכניים מצביעים על מצב מתוח (RSI/סטוכסטי גבוהים) למרות מגמת מחיר חיובית.
Positive Factors
High and durable profitability margins
Ero Copper's very strong gross, EBIT and EBITDA margins indicate high unit economics in its concentrate business. These margins provide a durable buffer against commodity price swings, support reinvestment and debt reduction, and underpin sustainable cash generation potential over the medium term.
Material deleveraging and stronger leverage metrics
The company has materially improved leverage, lowering debt-to-equity and cutting net debt multiples while maintaining a meaningful liquidity cushion. Lower leverage reduces refinancing risk, increases financial flexibility for brownfield expansions or mine development, and strengthens the balance sheet through cycles.
Record operations and resource development
Sustained operational improvements—record throughput and production—demonstrate rising capacity and execution capability. Higher steady-state production and new resource conversion (Xavantina gold output) diversify revenue mix and can materially boost medium-term output and cash flow resilience.
Negative Factors
Negative free cash flow and weak cash conversion
Despite solid operating cash coverage, negative free cash flow and poor cash conversion imply earnings are not fully translating into distributable cash. This constrains self-funded growth, limits buffer for capital plans or dividends, and may require continued external financing until conversion improves.
Rising operating costs and grade pressure
Lower grades and higher operating costs reduce per‑unit margins and raise strip ratios and processing expense. Persistently weaker grades or higher input/labor costs in Brazil would structurally raise unit costs, compress margins, and extend payback on expansion projects over multiple quarters.
Concentrated Brazil operations and commodity exposure
High geographic concentration in Brazil and dependence on copper and by-product prices expose the company to country-specific risks (inflation, labor) and commodity cycles. Structural price or demand weakness would materially affect revenues and cash flows across the medium term.
Ero Copper (ERO) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$5.02B
Dividend YieldN/A
Average Volume (3M)506.48K
Price to Earnings (P/E)23.1
Beta (1Y)1.85
Revenue Growth29.97%
EPS Growth658.38%
CountryCA
Employees3,690
SectorBasic Materials
Sector Strength58
IndustryCopper
Share Statistics
EPS (TTM)0.37
Shares Outstanding104,192,290
10 Day Avg. Volume681,207
30 Day Avg. Volume506,479
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)2.37
Price to Sales (P/S)2.96
P/FCF Ratio-7.24
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$46.02Price Target Upside6.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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:Mar 05, 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 revenue growth (+9.75% TTM) and high profitability (gross margin 42.71%, net margin 26.62%) support the score, alongside improving leverage (debt-to-equity down to 0.79 TTM) and solid ROE (20.12%). Offsetting this, free cash flow is negative and cash conversion is weak, which raises funding and liquidity risk despite good operating cash flow coverage (1.27x).Income Statement
Ero Copper shows strong revenue growth with a 9.75% increase in TTM, alongside healthy profitability metrics such as a gross profit margin of 42.71% and a net profit margin of 26.62%. The EBIT and EBITDA margins are also robust at 32.93% and 48.91%, respectively. However, the company experienced a significant drop in net income in 2024, which impacts the overall score.75
Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 0.79 in TTM from 1.06 in 2024, indicating better leverage management. Return on equity is strong at 20.12%, reflecting efficient use of equity. However, the equity ratio is not explicitly provided, which could provide further insights into asset financing.68
Positive
Cash Flow
Operating cash flow is strong with a coverage ratio of 1.27 in TTM, but free cash flow is negative, indicating potential liquidity issues. The free cash flow growth rate is significantly negative, and the free cash flow to net income ratio is also negative, suggesting challenges in converting profits into cash.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 588.23M | 470.26M | 427.48M | 426.39M | 489.92M | 324.08M |
| Gross Profit | 233.65M | 180.55M | 156.84M | 187.18M | 318.86M | 188.14M |
| EBITDA | 292.12M | 13.78M | 208.15M | 206.48M | 289.80M | 110.92M |
| Net Income | 137.81M | -68.47M | 92.80M | 101.83M | 201.05M | 51.62M |
Balance Sheet | ||||||
| Total Assets | 1.87B | 1.46B | 1.51B | 1.19B | 689.76M | 497.10M |
| Cash, Cash Equivalents and Short-Term Investments | 66.19M | 50.40M | 111.74M | 317.40M | 130.13M | 62.51M |
| Total Debt | 637.76M | 620.07M | 445.84M | 429.02M | 66.36M | 169.85M |
| Total Liabilities | 983.86M | 866.95M | 702.36M | 645.91M | 294.27M | 283.02M |
| Stockholders Equity | 884.28M | 587.13M | 804.25M | 538.59M | 393.06M | 212.70M |
Cash Flow | ||||||
| Free Cash Flow | 32.80M | -192.17M | -297.55M | -152.43M | 182.76M | 45.03M |
| Operating Cash Flow | 314.02M | 145.42M | 163.10M | 143.39M | 364.59M | 162.84M |
| Investing Cash Flow | -285.83M | -335.38M | -308.17M | -425.81M | -179.53M | -116.56M |
| Financing Cash Flow | 24.15M | 131.16M | 77.75M | 327.30M | -115.43M | 288.00K |
Ero Copper Technical Analysis
Neutral
43.18
Price Trends
39.71
Positive
34.37
Positive
27.15
Positive
Market Momentum
2.31
Positive
49.01
Neutral
40.66
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ERO, the sentiment is Neutral. The current price of 43.18 is below the 20-day moving average (MA) of 44.69, above the 50-day MA of 39.71, and above the 200-day MA of 27.15, indicating a neutral trend. The MACD of 2.31 indicates Positive momentum. The RSI at 49.01 is Neutral, neither overbought nor oversold. The STOCH value of 40.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $12.05B | 26.50 | 9.83% | ― | 44.69% | 1216.12% | |
73 Outperform | C$31.34B | 460.88 | 0.41% | ― | 8.17% | ― | |
72 Outperform | C$28.21B | 685.06 | 3.33% | 0.68% | -19.68% | -90.05% | |
70 Outperform | C$13.85B | 21.50 | 16.43% | 0.07% | 5.40% | 413.48% | |
69 Neutral | C$5.02B | 23.07 | 17.26% | ― | 29.97% | 658.38% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
54 Neutral | C$4.12B | -57.62 | -10.53% | ― | 1.17% | -169.37% |
* Basic Materials Sector Average
TSE:ERO
Ero Copper
43.18
24.33
129.07%
TSE:HBM
Hudbay Minerals
32.15
19.33
150.80%
TSE:TKO
Taseko Mines
10.40
7.55
264.91%
TSE:LUN
Lundin Mining
32.40
20.56
173.65%
TSE:CS
Capstone Copper
14.93
6.59
79.02%
TSE:FM
First Quantum Minerals
35.58
16.20
83.59%
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.