Abstract

Nexa Resources S.A. will release results on February 26, 2026 Post Market, with current expectations indicating revenue of $786.94 million (+11.29% year over year), EBIT of $173.95 million (+59.79% year over year), and adjusted EPS of $0.06 (-78.48% year over year), as investors gauge margin durability and segment execution.

Market Forecast

The market’s baseline for the upcoming print implies modest top-line growth and improved operating income, balanced by compressed earnings per share: revenue is projected at $786.94 million (up 11.29% year over year), EBIT at $173.95 million (up 59.79% year over year), and adjusted EPS near $0.06 (down 78.48% year over year). There is no formal forecast for gross profit margin or net profit margin in the current compilation, but the mix of higher EBIT and lower EPS points to non-operating items or financial expenses as a key swing factor versus last year’s comparable period.

The core business profile remains anchored by smelting and mining, with investors watching execution on throughput, cost control, and cash conversion as the primary near-term drivers across both activities. Within the portfolio, mining stands out as the most sensitive lever for free-cash-flow delivery in the quarter ahead, supported by last quarter’s mining revenue base of $371.59 million and reinforced by recent confirmation that full-year production and cost guidance for 2025 was met, which helps frame operating discipline for the current period.

Last Quarter Review

Nexa Resources S.A. reported last quarter revenue of $763.52 million (up 7.62% year over year), a gross profit margin of 19.54%, GAAP net profit attributable to the parent company of $69.34 million, a net profit margin of 9.08%, and adjusted EPS of -$0.03 (down 133.33% year over year).

The quarter’s operating profitability was positive but below the prior internal forecast, with EBIT at $78.32 million (down 23.48% year over year), underscoring a gap between operating earnings and bottom-line EPS that investors will watch closely this quarter for signs of normalization.

By business line, smelting contributed $540.77 million and mining contributed $371.59 million; after intersegment adjustments of $20.72 million and write-offs of -$169.56 million, consolidated revenue reached $763.52 million, up 7.62% year over year, reflecting a resilient top line despite the earnings-per-share compression.

Current Quarter Outlook (with major analytical insights)

Main Business: Smelting

Smelting remains pivotal to near-term earnings quality given its scale in the revenue mix and its influence on consolidated gross margin. The prior quarter’s gross profit margin of 19.54% sets a reference point; with the market now expecting revenue growth and a strong year-over-year expansion in EBIT, investors will focus on whether unit economics in smelting can maintain or improve from that baseline. The spread between EBIT growth and EPS contraction in the forecast positions cost-of-capital, financial charges, and any one-off items as critical explains of the earnings bridge, but within operations, smelting cost per unit and throughput utilization are the levers that can most readily support quarter-on-quarter margin steadiness.

A constructive result for this line in the quarter would show in stable-to-improved conversion costs, disciplined maintenance execution, and sustained recoveries that keep the gross margin resilient despite any price or mix variability. The last quarter’s smelting revenue contribution of $540.77 million highlights the scale effect: even incremental efficiency gains can contribute materially to operating income at this level of throughput. Against that backdrop, the 59.79% year-over-year uplift implied for EBIT this quarter suggests that operational delivery in smelting, coupled with disciplined procurement and cost management, could be a centerpiece of the improvement narrative, provided non-operating headwinds do not overshadow operating gains at the earnings-per-share line.

Most Promising Business: Mining

Mining is the line with the clearest path to reinforcing cash generation and earnings quality in the upcoming quarter, given the update that the company met its consolidated output and cost guidance for 2025. This achievement helps frame expectations for stable operational cadence as the company enters the new reporting period, supporting visibility into unit costs and production volumes. Last quarter’s mining revenue of $371.59 million anchors this segment’s importance, and with consolidated revenue forecast to rise 11.29% year over year alongside a 59.79% year-over-year gain in EBIT, consistent mine-site execution would be a natural contributor to the operating improvement.

The key variables for this segment remain grade stability, continuity of production, and the discipline of sustaining capital outlays relative to throughput, each of which can alter free-cash-flow conversion even when headline revenue trends are favorable. From a market perspective, the divergence between robust EBIT growth and a year-over-year decline in EPS points investors to watch for any signals on depreciation, amortization, finance costs, and tax lines that could offset operating gains from the mines. If management reinforces cost guidance and reiterates steady production cadence during the call, this would strengthen confidence that the implied uplift in operating income is supported by sustainable on-the-ground delivery rather than transient period effects.

Key Stock Price Drivers This Quarter

The first focal point is the reconciliation of the forecast bridge: with revenue expected to grow 11.29% year over year and EBIT projected to rise 59.79% year over year, the market will parse whether the operating beat trajectory is durable—and why EPS is forecast lower by 78.48% year over year. Clarity around financial expenses, interest rates on debt, and any non-recurring gains or charges will be essential to explain this disconnect and to reset expectations for the remainder of the year. If management can demonstrate that the EPS compression is episodic or driven by manageable, non-operating line items, the market may place greater weight on the healthier operating metrics.

The second driver is cash generation and balance sheet trajectory. Investors will evaluate the conversion of EBIT into operating cash flow, the level and timing of sustaining and development capital expenditure, and any commitments that might influence near-term free-cash-flow potential. Delivery on production-cost discipline, now corroborated by having met prior guidance, can translate into greater confidence on cash generation; conversely, incremental financing costs or shifts in working capital could dull the benefit from the expected operating uplift.

The third driver is how management frames the 2026 operating playbook. In the absence of explicit margin guidance in the forecast dataset, commentary around production cadence, maintenance timing, and cost-control measures across smelting and mining will inform how investors extrapolate the quarter’s results into the next periods. The market is also likely to pay close attention to updated commentary on any planned debottlenecking, throughput initiatives, or procurement efficiencies that could sustain or enhance the current gross margin line. Finally, given the neutral stance from multiple covering analysts, any incrementally positive signals on deleveraging, cost of capital, or capital allocation could recalibrate sentiment, particularly if paired with evidence of resilient margins.

Analyst Opinions

Recent analyst updates cluster around a cautious, neutral stance, with prominent coverage maintaining Hold ratings and emphasizing a balanced risk-reward into the print. RBC Capital’s Sam Crittenden reiterated a Hold rating with a $10.00 price target, highlighting a view that near-term upside is contingent on consistent operational delivery, disciplined costs, and clarity on earnings translation after finance charges. Scotiabank’s Orest Wowkodaw also maintained a Hold rating with a $14.50 price target, reinforcing a similar posture that recognizes operating improvements while awaiting confirmation of sustained free-cash-flow generation and a clearer path to earnings normalization.

The consensus tilt toward neutrality aligns with the mixed signal embedded in forecasts: strong operating momentum at the EBIT line contrasted with a depressed year-over-year EPS outcome. Coverage suggests attention will center on whether non-operating headwinds are transitory or structural, and whether management can articulate a convincing route to align EPS closer to the healthier operating trajectory. In this framing, analysts are looking for evidence that cost discipline—now underscored by the company having met its 2025 production and cost guidance—translates into durable cash generation after interest and tax, and that capital allocation remains calibrated to preserve balance-sheet flexibility.

In practical terms, this means the call’s most important passages will likely involve the bridge from operating profit to net income, with explicit detail on interest expense, any hedging results, and one-off items. Analysts also want sharper visibility on capital intensity and the cadence of expenditures that might shape free cash flow and leverage metrics over the next several quarters. The neutral posture, therefore, should not be read as dismissive of the operating improvement implied by the EBIT forecast; rather, it reflects a preference to see confirmation that the improvement can be captured at the bottom line and sustained without adding disproportionate financial risk.

From an expectations-management standpoint, delivering near the top end of the revenue forecast while affirming cost continuity would strengthen confidence in the operating base. However, a credible explanation for the EPS gap versus last year—and, ideally, a path to narrow that gap through reduced finance costs or operational enhancements—would carry outsized weight in shifting sentiment. With multiple firms holding their ratings into the event, the preponderance of professional opinion remains constructive on execution yet reserved on the equity implication until the earnings bridge and cash conversion path become clearer.