Shares of Nickel Industries Ltd plummeted 7.19% during intraday trading on Tuesday, following a significant broker downgrade that cited heightened operational challenges.

Jefferies walked back its bullish call on the stock, cutting its rating to hold from buy and slashing its price target by 17% to A$1.00 per share. The firm pointed to increasing geopolitical headwinds and rising sulfur prices, which are expected to reduce profit margins at the company's high-pressure acid leach operations.

Analyst Mitch Ryan noted that while the company is well-positioned to benefit from strong nickel pricing, the deteriorating regulatory environment in Indonesia and other factors are forcing a larger discount on future cash flows, leading to the revised outlook.