Sandfire Resources (ASX:SFR) is "well placed" to deliver "incrementally" better production each quarter of fiscal year 2026, said Jefferies in a Monday note.

The company on Monday reported group copper equivalent production of 35,500 tonnes for the fiscal first quarter, down from 38,300 tonnes a year earlier.

The investment firm noted that the production was below its estimates but broadly in line with Visible Alpha estimates.

Jefferies sees the company's rapid deleveraging, even with a softer production quarter, as a meaningful catalyst, and with an imminent net cash position, the company is expected to increase focus on capital management via reinvestment in growth and dividends.

Jefferies has kept a hold rating on Sandfire Resources and raised its price target to AU$14.50 from AU$14.

The company's shares fell almost 4% in Tuesday's close of trading.