We recently published a list of 7 Best Metal Stocks to Buy According to Analysts. In this article, we are going to take a look at where Nexa Resources S.A. (NYSE:NEXA) stands against other best metal stocks to buy according to analysts.
The metals industry, which supplies vital materials for manufacturing, renewable energy, and construction, is a major contributor to the expansion of the world economy. This market has grown remarkably in the last several years. The Business Research Company projects that the worldwide metals market will increase by 5.9%, from $4,392.33 billion in 2024 to $4,651.03 billion in 2025. Growing demand for industrial and precious metals, particularly in the construction, automotive, and renewable energy industries, is driving this growth.
Since copper is still one of the most sought-after metals, the growing demand for the metal is a major factor in this development. The copper market is projected to increase by 7.8% during the period 2024-2025, reaching $190.72 billion, according to The Business Research Company. This increase is mostly attributable to the growth of infrastructure worldwide and the extensive use of copper in electrification projects.
At the same time, there is a high demand for metals like copper, aluminum, and steel, especially from the expanding construction sector. According to the U.S. Census Bureau, the value of monthly construction activities in the United States increased by 4.3% on a YoY basis in December 2024. Thus, the global acceleration of infrastructure projects is anticipated to support the metals market for the foreseeable future due to this increasing demand.
Along with industrial metals, precious metals have done noticeably better than the overall market, driven by investor demand for safe-haven assets and inflationary fears. For example, gold ETFs had their greatest gain since 2010 in 2024, rising a whopping 26%. It is anticipated that this trend will continue into 2025 if inflationary pressures continue to drive demand for gold as a protective investment. Similarly, as of February 26, 2025, silver futures experienced a 40.34% year-over-year rise while gold futures produced an impressive 43.64% return, as reported by S&P Global. These figures highlight the rising demand for gold and silver as investments against an unstable economic landscape.
Simultaneously, the metals sector is undergoing a surge in sustainability efforts and technological breakthroughs. Metal production is being revolutionized by innovations such as generative AI in additive manufacturing, which is making it more sustainable and efficient. On the other hand, the global market for recycled scrap metal is expected to rise at a robust 6.4% annual growth rate from $70.5 billion in 2024 to $75.5 billion in 2025. By 2035, the recycling industry is predicted to account for 72.5% of the market value as environmental restrictions and sustainability drive companies to use recycled metals, especially ferrous metals.
Beyond technological innovations, metals like lithium, copper, and zinc are at the center of industry transformation as a result of the move toward cleaner energy and electrification. Lithium is becoming more affordable and widely available because of new extraction techniques, which are enhancing its use in energy storage applications. For instance, the lithium market is expected to expand by 16.3%, from $7.75 billion in 2024 to $9.01 billion in 2025. Meanwhile, as reported by Zinc.org, the demand for zinc in solar power is predicted to reach 568,000 tons by 2030, demonstrating the rising significance of zinc in renewable energy.
Therefore, the overall metal market is experiencing strong demand, technological breakthroughs, and increased focus on sustainability and clean energy initiatives. Therefore, experts are enticed to pick the best metal stocks with the potential for rapid growth to capitalize on bright future prospects of the market.
Our Methodology:
To curate our list of the 7 Best Metal Stocks to Buy According to Analysts, we picked the top companies having a substantial exposure to extraction, processing, and manufacturing of metals. Furthermore, we made sure that we pick companies with strong market capitalization. Finally, we ranked the stocks based on the upside potential predicted by a healthy number of analysts, as of writing this article.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a large, metallic machine processing ore and minerals in a mine.
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.
Overall, NEXA ranks 2nd on our list of best metal stocks to buy according to analysts. While we acknowledge the potential of NEXA as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NEXA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.