NEXA - Nexa Resources double downgraded to Sell equivalent at Morgan Stanley

2023-03-30 15:27:31 ET

• Nexa Resources ( NYSE: NEXA ) -0.6% in Thursday's trading as Morgan Stanley downgraded the stock by two notches to Underweight from Overweight with a $5.60 price target, trimmed from $6, saying it overestimated the timing and magnitude of the company's operational turnaround.
• Morgan Stanley's Carlos de Alba said the bank is cutting estimates for Nexa's ( NEXA ) 2023 and 2024 EBITDA by ~40 and ~5%, respectively, while also lowering zinc and copper mine production and raising cash cost estimates by a respective 9% and 8% in those two years.
• The analyst now expects Nexa ( NEXA ) will post negative free cash flow yield in FY 2023 of 3.1% due to the lower EBITDA and higher capex expectations.
• Morgan Stanley also downgraded Southern Copper ( NYSE: SCCO ) to Equal Weight from Overweight with a $70 price target, after outperforming copper peers over the last three, six and 12 months, and the stock now more adequately reflects the company's strong cash generation and consistent returns to shareholders.
• Separately, Nexa Resources ( NEXA ) said following a two-week suspension due to heavy rains, it has resumed operations at its Cerro Lindo zinc-copper mine in Peru .

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