Nickel Industries (ASX:NIC) could see higher earnings before interest, tax, depreciation, and amortisation (EBITDA) as a result of the Middle East conflict-caused sulphur supply reduction, said Jefferies in a Wednesday note.
Higher sulphur prices could provide cost support for operators of nickel high-pressure acid leach facilities and nickel producers with larger attributable rotary kiln electric furnace production may benefit from margin expansion as higher costs are passed through, the note said.
Jefferies kept a buy rating on Nickel Industries with a price target of AU$1.10.
The company's shares fell 2% in recent Thursday trade.