How to Play Nexa Resources Stock Ahead of Its Q2 Earnings Release?

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Nexa Resources’ Earnings Surprise History

Over the trailing four quarters, Nexa Resources’ earnings beat the Zacks Consensus Estimate thrice and missed the same in the remaining quarter. NEXA has an average trailing four-quarter earnings surprise of 59.9%. The trend is shown in the chart below.

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What the Zacks Model Unveils for NEXA

Our proven model does not conclusively predict an earnings beat for Nexa Resources this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Nexa Resources is 0.00%.

Zacks Rank: NEXA currently sports a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Have Shaped Nexa Resources’ Q2 Performance

NEXA’s first-quarter 2026 performance is likely to have reflected a strong pricing environment. Through the quarter, copper prices averaged $6.19 per pound, suggesting 31% year-over-year growth. Silver and gold jumped 118.7% and 37.4% year over year, respectively. Lead prices inched up 0.2%.

Along with NEXA, the rise in metal prices is also aiding its peers Hudbay Minerals Inc. HBM  and Anglo American plc. NGLOY.

On the production front, zinc output is expected to remain a key growth driver following 79 kt production in the first quarter, up 18% year over year, driven by record quarterly production at the Aripuanã mine.

In late May, the company announced that it was gradually resuming production at its Cajamarquilla smelter in Peru, which was temporarily suspended following a fire on May 13. Nexa Resources expects a production impact of 7,000 tons of refined zinc, indicating 2% of annual production due to the temporary production halt at Cajamarquilla. However, the company expects to recover the lost production in the second half of 2026.

Nexa Resources’ 2026 guidance points to a 6% year-over-year increase in consolidated zinc production, primarily driven by higher output from Aripuanã, Atacocha and Vazante, partially offset by lower volumes at Cerro Lindo and El Porvenir due to mine sequencing. This is expected to have impacted the second-quarter zinc production as well.  

After a 16% decline in the first quarter of 2026, copper production is expected to decline 17% in 2026, mainly reflecting the planned mining of lower-grade zones. Lead production in 2026 is expected to be broadly stable compared with 2025. Silver production was down 3% year over year in the first quarter. Silver production is projected to decline 3% in 2026.

At the midpoint of the 2026 guidance, total metal sales volumes are expected to increase 3% from the 2025 actual, reflecting a partial recovery from the lower 2025 base, which was impacted by operational challenges at the Brazilian smelters and low Treatment Charges. 

Cost dynamics are likely to have presented some headwinds. Nexa Resources expects a 4% increase in consolidated run-of-mine costs in 2026, driven by higher costs at Vazante, Cerro Lindo and El Porvenir at the mid-point, attributed to lower treated ore volumes, higher energy costs and unfavorable foreign currency variations. These increases are expected to have been partially offset by reductions at Aripuanã and Atacocha, reflecting efficiency gains and lower variable costs. In 2026, consolidated conversion costs are forecast to remain at similar levels to 2025.

Overall, Nexa Resources’ second-quarter 2026 performance is likely to have been shaped by a favorable pricing environment, strong zinc production and improving smelting operations, partially offset by weaker copper volumes and modest cost inflation.

NEXA’s Price Performance & Valuation

Nexa Resources stock has rocketed 171.2% in a year, outperforming the Zacks Mining - Miscellaneous industry’s 39.1% jump. Meanwhile, the Basic Materials sector has risen 27.5% and the S&P 500 has rallied 22.7%.

Image Source: Zacks Investment ResearchThe company also outperformed its peers like Hudbay Minerals and Anglo American, which have soared 146.3% and 83.3%, respectively, in the same time frame. 

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Nexa Resources’ stock is currently trading at a forward 12-month earnings multiple of 4.33X, which is a discount to the industry average of 14.69X.

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Meanwhile, Hudbay Minerals and Anglo American are trading higher at 13.03X and 17.95X, respectively.

Investment Thesis on Nexa Resources

NEXA is focused on optimizing its portfolio to concentrate its efforts on its core operations. In sync with this, the company completed the divestment of its Otavi and Namibia North project in late 2025.

Nexa Resources is executing its long-term strategy to replace and expand its mineral reserves and resources. The efforts have already extended current life-of-mine plans across its portfolio, pushing Aripuanã’s life to 2041 and El Porvenir to 2036. 

NEXA is currently executing Phase I of its Cerro Pasco Integration Project, which is an operational initiative to physically link El Porvenir and Atacocha underground mines. The integration will extend the life of mine at the Cerro Pasco Complex more than 15 years while boosting the operating cash flow.

Should You Buy NEXA Now?

Nexa Resources is poised to benefit from the current increase in metal prices and higher production expectations. The company’s ongoing exploration and investment strategies will further aid growth. While its appealing valuation makes the stock attractive, cost inflation and lower copper volumes suggest caution for new investors. Existing shareholders should stay invested in the NEXA stock to benefit from its solid long-term growth prospects.

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This article originally published on Zacks Investment Research (zacks.com).

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