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Hudbay Minerals (TSE:HBM)
:HBM

Hudbay Minerals (HBM) AI Stock Analysis

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Hudbay Minerals

(NYSE:HBM)

Rating:71Outperform
Price Target:
C$13.50
▲(5.30%Upside)
Hudbay Minerals' strong financial performance and positive earnings call are the most significant factors contributing to the score. Technical analysis shows bullish momentum, though caution is advised due to potential overbought conditions. The high P/E ratio and low dividend yield suggest valuation concerns, while positive corporate events indicate strategic growth.
Positive Factors
Asset Development
Copper World is set to become HBM’s marquee asset, producing an average of 92ktpa Cu in its first 10 years.
Operational Efficiency
HBM is working to push throughput another 10% to offset the impact and maximize Constancia production.
Permitting Success
HudBay has received the Air Quality Permit for Phase 1 of its Copper World project in Arizona, de-risking the project from a permitting perspective.
Negative Factors
Growth Perception
The de-risking of Copper World is seen as key to undoing the perception of a lack of growth avenues for HudBay Minerals, potentially driving a re-rating of the company's stock.
Production Guidance
For 2026, HBM lowered its copper volume guidance by 9% at mid-point.

Hudbay Minerals (HBM) vs. iShares MSCI Canada ETF (EWC)

Hudbay Minerals Business Overview & Revenue Model

Company DescriptionHudbay Minerals Inc., a diversified mining company, together with its subsidiaries, focuses on the discovery, production, and marketing of base and precious metals in North and South America. It produces copper concentrates containing copper, gold, and silver; silver/gold doré; molybdenum concentrates; and zinc metals. The company owns three polymetallic mines, four ore concentrators, and a zinc production facility in northern Manitoba and Saskatchewan, Canada, as well as in Cusco, Peru; and copper projects in Arizona and Nevada, the United States. HudBay Minerals Inc. was founded in 1927 and is headquartered in Toronto, Canada.
How the Company Makes MoneyHudbay Minerals generates revenue through the extraction, production, and sale of base and precious metals. The company's key revenue streams include the sale of copper concentrate, which is derived from its mining operations in regions such as Manitoba, Canada, and Peru. Additionally, the company earns income from the sale of zinc and precious metals, including gold and silver, which are by-products of its primary mining activities. Hudbay's revenue is significantly influenced by global commodity prices, which impact the value of its metal sales. The company also engages in strategic partnerships and joint ventures to enhance its mining capabilities and expand its market presence, further contributing to its earnings.

Hudbay Minerals Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: 19.81%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Positive
The earnings call for Hudbay Minerals was predominantly positive, highlighting strong financial performance, record low cash costs, and significant progress in growth strategies. While there are concerns about the depletion of the Pampacancha deposit and delays in permitting for new projects, the company's operational improvements and robust growth plans outweigh these challenges.
Q1-2025 Updates
Positive Updates
Record Low Cash Costs
Hudbay achieved record low consolidated cash costs of negative $0.45 per pound and sustaining cash costs of $0.72 per pound, significantly improving compared to the previous quarter due to higher byproduct credits and strong operating cost performance.
Strong Free Cash Flow and EBITDA
Hudbay generated seven consecutive quarters of meaningful free cash flow and achieved a new quarterly record with an adjusted EBITDA of $287 million, representing a 12% increase over the previous quarter.
Copper and Gold Production Exceeds Expectations
Consolidated copper production was 31,000 tonnes, and gold production exceeded expectations at 74,000 ounces, primarily due to outperformance in Manitoba.
Significant Progress in Growth Strategy
Hudbay consolidated ownership at Copper Mountain and received full permits for Copper World, positioning the company to increase long-term copper production by more than 50%.
Operational Improvements in Manitoba
The Manitoba operations saw a 17% increase in gold production compared to the previous quarter, driven by higher grades and improved mining techniques, with gold cash costs decreasing by 38%.
Negative Updates
Depletion of Pampacancha
The Pampacancha deposit is expected to be depleted by December 2025, which may impact copper production levels if new satellite opportunities are not developed timely.
Permitting Delays
Permitting for the Maria Reyna and Caballito properties in Peru is ongoing, with completion expected in 2025, which may delay exploration and production activities.
Company Guidance
During the Hudbay Minerals Incorporated First Quarter 2025 Results Conference Call, CEO Peter Kukielski highlighted robust performance metrics, showcasing significant operational and financial achievements. The company reported consolidated copper production at 31,000 tonnes and gold production at 74,000 ounces, with exceptional cost efficiencies reflected in record low consolidated cash costs of negative $0.45 per pound and sustaining cash costs of $0.72 per pound. Adjusted EBITDA reached a quarterly record of $287 million, marking a 12% increase from the previous quarter, while adjusted net earnings per share rose to $0.24. Hudbay ended the quarter with $583 million in cash and cash equivalents, maintaining a net debt of $526 million and a stable leverage ratio of 0.6 times. Importantly, the company is on track to achieve its full-year 2025 production and cost guidance, driven by strong performance across its operations in North and South America and strategic advancements such as the consolidation of Copper Mountain ownership, which is expected to increase long-term copper production by over 50%.

Hudbay Minerals Financial Statement Overview

Summary
Hudbay Minerals exhibits strong revenue and cash flow growth, supported by improving profitability and a stable balance sheet. While leverage management is effective, profitability metrics such as ROE suggest opportunities for enhancement. Overall, the financial position is solid with potential for future growth.
Income Statement
75
Positive
Hudbay Minerals has shown a solid revenue growth with a 20.60% increase from 2022 to 2023 and a further 20.63% increase in TTM. The gross profit margin in TTM is 27.77%, indicating effective cost management. The net profit margin has improved to 4.23% in TTM, reflecting better operational efficiency. However, volatility in net income in previous years could indicate some operational risks.
Balance Sheet
70
Positive
The company maintains a healthy equity ratio of 46.06% in TTM, demonstrating a stable capital structure. The debt-to-equity ratio has decreased, indicating improved leverage management. However, the return on equity stands at 3.40% in TTM, suggesting room for improvement in profitability.
Cash Flow
78
Positive
Hudbay Minerals has achieved a substantial free cash flow growth of 64.54% from 2022 to 2023, with a strong operating cash flow to net income ratio of 7.57 in TTM. This indicates robust cash generation relative to earnings, although fluctuations in capital expenditures and financing activities may pose potential risks.
Breakdown
TTMDec 2023Dec 2022Dec 2021Dec 2020Dec 2019
Income StatementTotal Revenue
2.04B1.69B1.46B1.50B1.09B1.24B
Gross Profit
566.12M784.22M276.89M131.02M39.00M151.54M
EBIT
392.08M297.17M128.05M-63.00M-136.18M-17.23M
EBITDA
752.75M621.10M502.54M296.77M267.23M329.40M
Net Income Common Stockholders
86.25M66.37M70.38M-244.36M-144.58M-343.81M
Balance SheetCash, Cash Equivalents and Short-Term Investments
892.68M250.52M225.66M270.99M439.13M396.15M
Total Assets
2.00B5.31B4.33B4.62B4.67B4.46B
Total Debt
0.001.38B1.25B1.26B1.20B1.07B
Net Debt
-892.68M1.13B1.02B987.29M760.05M671.06M
Total Liabilities
324.15M3.11B2.75B3.14B2.97B2.61B
Stockholders Equity
1.67B2.10B1.57B1.48B1.70B1.85B
Cash FlowFree Cash Flow
322.15M195.75M178.84M6.38M-121.70M51.65M
Operating Cash Flow
653.40M476.85M487.80M383.82M239.48M310.86M
Investing Cash Flow
-366.50M-271.78M-337.67M-375.00M-359.02M-292.37M
Financing Cash Flow
-90.33M-182.39M-196.30M-175.90M162.09M-137.78M

Hudbay Minerals Technical Analysis

Technical Analysis Sentiment
Positive
Last Price12.82
Price Trends
50DMA
10.85
Positive
100DMA
11.25
Positive
200DMA
11.60
Positive
Market Momentum
MACD
0.56
Negative
RSI
69.67
Neutral
STOCH
82.84
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HBM, the sentiment is Positive. The current price of 12.82 is above the 20-day moving average (MA) of 11.88, above the 50-day MA of 10.85, and above the 200-day MA of 11.60, indicating a bullish trend. The MACD of 0.56 indicates Negative momentum. The RSI at 69.67 is Neutral, neither overbought nor oversold. The STOCH value of 82.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HBM.

Hudbay Minerals Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSLUN
75
Outperform
$11.55B25.632.66%2.52%-8.36%-200.42%
TSHBM
71
Outperform
C$5.06B23.756.50%0.15%10.69%79.56%
TSFM
67
Neutral
C$17.54B93.991.22%-13.79%
TSERO
64
Neutral
$2.08B76.632.54%16.82%-67.73%
TSCS
64
Neutral
$5.76B52.512.71%37.30%
TSTKO
61
Neutral
$1.04B11.15-12.40%7.36%-159.52%
51
Neutral
$2.02B-1.12-21.36%3.65%2.87%-30.54%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:HBM
Hudbay Minerals
13.08
0.29
2.31%
TSE:ERO
Ero Copper
21.75
-5.77
-20.97%
TSE:CS
Capstone Copper
7.97
-1.39
-14.85%
TSE:TKO
Taseko Mines
3.56
0.17
5.01%
TSE:FM
First Quantum Minerals
21.42
4.15
24.03%
TSE:LUN
Lundin Mining
14.43
-0.97
-6.27%

Hudbay Minerals Corporate Events

Stock Buyback
Hudbay Minerals Receives Approval for Share Repurchase Program
Positive
May 28, 2025

Hudbay Minerals Inc. announced that it has received approval from the Toronto Stock Exchange to initiate a normal course issuer bid (NCIB) for its common shares, allowing the company to repurchase up to 5% of its outstanding shares over a 12-month period. This move is driven by Hudbay’s belief that its current market price may not fully reflect the company’s underlying value and future prospects, and the repurchase is seen as a strategic use of capital that benefits shareholders.

The most recent analyst rating on (TSE:HBM) stock is a Buy with a C$18.00 price target. To see the full list of analyst forecasts on Hudbay Minerals stock, see the TSE:HBM Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Hudbay Minerals Reports Strong Q1 2025 Results with Record Cost Performance
Positive
May 12, 2025

Hudbay Minerals reported strong financial results for the first quarter of 2025, driven by robust gold production and stable copper output. The company achieved record low cash costs and high adjusted EBITDA, reaffirming its production and cost guidance for the year. Significant progress was made in advancing growth strategies, including consolidating ownership at Copper Mountain and securing full permits at Copper World, enhancing long-term copper production. These developments position Hudbay favorably in the industry, promising substantial value for stakeholders.

M&A TransactionsBusiness Operations and Strategy
Hudbay Minerals Consolidates Full Ownership of Copper Mountain Mine
Positive
Mar 27, 2025

Hudbay Minerals has acquired Mitsubishi Materials Corporation’s 25% interest in the Copper Mountain Mine, consolidating 100% ownership of the asset. This strategic move increases Hudbay’s exposure to a high-quality copper asset in Canada and is expected to significantly boost its copper production by 2027. The transaction, valued at up to $44.25 million, is structured with low upfront costs and deferred payments, enhancing Hudbay’s net asset value per share. The acquisition simplifies the ownership structure and strengthens Hudbay’s position in the North American copper market, with plans to further invest in the optimization and expansion of the mine.

Business Operations and StrategyFinancial Disclosures
Hudbay Minerals Announces Positive Production Outlook and Exploration Results
Positive
Mar 27, 2025

Hudbay Minerals has released its annual mineral reserve and resource update, along with a three-year production outlook. The company expects stable copper production, averaging 144,000 tonnes annually, with a significant increase projected for 2027 due to optimization efforts at Copper Mountain. Gold production is also expected to remain strong, with contributions from high-grade zones in Peru. Hudbay’s exploration efforts in Snow Lake and Peru aim to extend mine life and increase production, while feasibility studies for the Copper World project in Arizona are underway. The company’s strategic moves and robust asset base are set to enhance its production profile and stakeholder value.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.