Nickel Industries (ASX:NIC) is well positioned to capture upside from a strong nickel complex, with an expanding production base and upcoming earnings growth, although the geopolitical climate remains uncertain, Jefferies said in a Wednesday note.

The company's roughly $90 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for July and August maps to $135 million for the third quarter if that level is maintained through September, the investment firm said.

While Nickel Industries' Excelsior nickel-cobalt project in Indonesia ramped up to around 50% of nameplate capacity within four weeks of commissioning, low water availability has since hindered the initiation of two remaining autoclaves, with operating rates potentially falling to around 30% of nameplate unless river levels return to normal, Jefferies said.

It noted that the impact of water availability spans multiple producers as industry commentary suggests various operators are considering curtailments to production rates.

Jefferies increased its third-quarter ore sales estimate for Nickel Industries to 4.5 million tonnes and raised its EBITDA margin forecast to $17.73 per wet metric tonne.

The investment firm kept a hold rating on Nickel Industries with a price target of AU$0.90.

The company's shares were down 2% in recent Thursday trade.