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Ero Copper (NYSE:ERO) is upgraded Tuesday to Outperform from Market Perform with a C$36 price target, bumped up from $34, at Raymond James, which expects a step change in copper production starting in Q3 and growing through 2025.
The shift should translate into strong cash flows and EBITDA growth over the period, and Ero Copper’s (ERO) current valuation does not fully reflect the anticipated growth compared with other copper producers, according to analyst Farooq Hamed.
The miner should see growing production at its Brazil assets, with the Tucuma project expected to begin production in H2 2024, Hamed says; also, the Xavantina mine contributes strong operating margins with mine life extension potential through the company’s exploration program.
The analyst updated his model, and now sees H2 2024 EBITDA of ~$270M, representing a significant increase over $95M in H1.
Ero Copper (ERO) shares -5.9% on Tuesday, with industrial metals producers sharply lower across the board as Goldman Sachs cut its copper price target on weak Chinese demand.
