Why the Cajamarquilla update matters for Nexa Resources (NYSE:NEXA) shareholders

The latest catalyst for Nexa Resources (NYSE:NEXA) is its update on the gradual resumption of operations at the Cajamarquilla zinc smelter in Peru after a recent incident disrupted activity.

Nexa reports electrolysis lines are fully operational and one casting line is already producing zinc bars, with remaining casting lines expected back online shortly and production effects concentrated in the second quarter of 2026.

At a share price of US$15.14, Nexa Resources has seen a 1-day share price return of 1.54% and a 90-day share price return of 19.68%. The 1-year total shareholder return of 207.91% and 3-year total shareholder return of 187.84% point to strong longer term momentum, with recent Cajamarquilla and governance updates helping shape how investors are sizing up both risk and resilience.

If the Cajamarquilla update has you thinking about where the next mining story could come from, this is a good moment to scan 8 top copper producer stocks.

Yet with Nexa trading at US$15.14, above the average analyst price target and with a mixed value score of 3 out of 6, is the stock now stretched, or are markets still underestimating its potential?

Most Popular Narrative: 90% Overvalued

According to the most followed narrative, Nexa Resources’ fair value of $15.00 sits well below the SWS estimate of future cash flow value at $10.49, while the stock last closed at $15.14, so readers are looking at three very different anchors for what Nexa might be worth.

The valuation also remains visibly compressed. Nexa’s shares are currently around $8.77. The equity market is still treating it more like a stressed cyclical than a company that just posted over $1.1 billion of adjusted EBITDA and brought net leverage down materially.

The narrative leans heavily on Nexa’s recent earnings strength, cash generation and balance sheet repair. It also incorporates assumptions around margins, leverage and the duration of current profitability. Readers may want to examine which financial levers are driving that $15 fair value and how they compare with a lower cash flow estimate and the current share price.

Result: Fair Value of $15.00 (OVERVALUED)

However, this narrative could unravel quickly if zinc prices weaken or if operational issues at mines or smelters hit cash flow harder than expected.

Another View: Multiples Paint a Cheaper Picture

While the most followed narrative sees Nexa as about 90% overvalued against a US$15 fair value, the current P/E of 9.5x tells a different story. That multiple sits well below the US Metals and Mining average of 19.9x, the peer average of 71.7x, and even the fair ratio of 15.2x that the market could move towards. For investors, that gap simply indicates that the valuation risk may run in both directions. This raises a key question: which signal should be given more weight, the narrative or the multiple?

Next Steps

With sentiment split between risk and reward, this is a moment to move quickly and independently stress test the story yourself against the 3 key rewards and 3 important warning signs.

Looking for more investment ideas?

If Nexa has sharpened your interest in metals and mining, it is worth broadening your watchlist to other opportunities with different risk and income profiles.

• Target potential mispricing by scanning companies that screen as high quality yet out of favor using the 46 high quality undervalued stocks.
• Strengthen your income stream by focusing on companies with more robust yields and balance sheets through the 10 dividend fortresses.
• Reduce portfolio stress by concentrating on companies that carry lower risk scores and sturdier finances in the 63 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.