7 Best Metal Stocks to Buy According to Analysts

2. Nexa Resources S.A. (NYSE:NEXA)

Average Upside Potential: 29.15%

Number of Hedge Fund Holders: 4

Nexa Resources S.A. (NYSE:NEXA), one of the top producers of zinc, is a well-known global metals company. The company owns three zinc smelters and six polymetallic mines in Brazil and Peru. Nexa’s primary output is zinc, but it also produces copper, lead, silver, and other byproducts, all of which add to its diversified revenue streams.

Nexa Resources S.A. (NYSE:NEXA) announced impressive financial results for Q4 ended December 31, 2024, which were fueled by better cost efficiency and higher zinc prices. Net revenue increased by 18% to $741 million, while adjusted EBITDA rose 79% to $197 million. In 2024, full-year EBITDA was $714 million, reflecting a 76% increase over 2023. Sustained improvements in operational efficiency and increased output at the Aripuanã mine fueled this growth.

Although the company’s financial performance was positive, it faced several operational difficulties. Due to decreased output at major mines, zinc production fell by 19% year-over-year to 74,000 tons in Q4. Nevertheless, due to the steady demand for zinc, the company’s smelting sales increased by 6% to reach 152,000 tons. While Nexa’s full ramp-up has been postponed until 2026 due to tailings difficulties, Aripuanã’s remarkable 43% rise in full-year output was a silver lining. Nexa Resources S.A. (NYSE:NEXA) has made significant progress with its Cerro Pasco integration project, which aims to prolong the mine’s life and increase long-term output, in addition to these operational measures.

Looking ahead, Nexa Resources S.A. (NYSE:NEXA) anticipates significantly greater cash flow in 2025, supported by Aripuana’s ongoing cost-cutting initiatives and production ramp-up. These initiatives aim to reduce debt, extend the life of mines, and provide value to shareholders.

However, Nexa Resources S.A. (NYSE:NEXA) still has a few challenges to overcome. Its Magistral project is still undergoing government discussions and is at risk due to rising smelting prices and regulatory obstacles. The purchase of a fourth tailings filter has also been authorized by the company to boost filtering capacity and enable full production. This filter will be installed in 2025, and it will begin operating in the first quarter of 2026.

Despite these obstacles, Nexa Resources’ strategic initiatives, operational enhancements, and solid financial base into 2025 make it one of the best metal companies to consider investing in.