Nexa Resources: A High-Conviction Buy as Zinc Demand Surges and Deleveraging Drives Value

In the volatile world of commodities, few stories blend operational mastery, financial discipline, and strategic foresight as compellingly as Nexa Resources. The Brazilian zinc producer's Q3 2025 results, released on October 23, 2025, have ignited investor optimism, with shares surging 4.77% in pre-market trading, according to an Investing.com transcript. This performance reflects not just a one-off triumph but a sustained transformation rooted in disciplined execution and a clear-eyed response to global zinc demand. For investors seeking exposure to a sector poised for structural growth, Nexa's trajectory offers a rare combination of near-term momentum and long-term resilience.

Operational Excellence: Aripuanã's Surge and Cajamarquilla's Efficiency

Nexa's operational execution in Q3 2025 was nothing short of extraordinary. The Aripuanã mine in Brazil, the company's crown jewel, delivered a record zinc output of 10.4kt, a 70% quarter-over-quarter increase and a 39% year-over-year jump, according to a Mining.com press release. This leap was driven by improved plant stability and operational optimization, underscoring Nexa's ability to scale production in response to surging demand. Meanwhile, the Cajamarquilla smelter in Peru achieved record volumes, operating entirely on renewable hydroelectric energy-a testament to the company's dual focus on efficiency and sustainability, as noted in a Yahoo Finance article.

The significance of these gains cannot be overstated. Zinc, a critical input for construction, automotive, and renewable energy sectors, is witnessing renewed demand as global economies pivot toward decarbonization. Nexa's ability to ramp production at Aripuanã positions it to capitalize on this trend, while Cajamarquilla's green energy model aligns with the decarbonization goals of its customers.

Financial Turnaround: Deleveraging and Earnings Outperformance

Nexa's financial metrics in Q3 2025 further cement its appeal. The company reported net income of $100 million, a stark improvement from $13 million in Q2 2025 and $6 million in Q3 2024, according to a StockTitan article. Earnings per share (EPS) of $0.52 handily exceeded the forecasted $0.286, driven by higher zinc prices and operational efficiency, as discussed in the earnings call transcript. Revenue totaled $764 million, an 8% quarter-over-quarter increase, reflecting robust demand and pricing power.

Equally compelling is Nexa's deleveraging progress. Net debt has fallen to $1.479 billion, with the net debt/LTM adjusted EBITDA ratio improving to 2.2x-a level that suggests manageable leverage and a path to further balance sheet strength, as also reported in the StockTitan article. This financial discipline is critical in a sector prone to cyclical volatility, as it provides Nexa with the flexibility to invest in growth or reward shareholders during downturns.

Sustainability as a Strategic Pillar

Nexa's long-term sustainability initiatives, unveiled in its 2025-2030 ESG strategy, reinforce its competitive advantage. The company aims to reduce Scope 1 emissions by 20% by 2030 while maintaining a near-fully renewable energy matrix. Innovations such as AI-based thermographic monitoring at Cajamarquilla and hydrogen-powered equipment demonstrate a commitment to cutting-edge decarbonization, as detailed on Nexa's climate-change page. Social initiatives, including the Hand Care program and influenza vaccination drives, also highlight Nexa's focus on community well-being-a critical factor in securing social license to operate.

These efforts are not merely ethical but economic. As global regulations tighten and consumers demand greener supply chains, Nexa's sustainability credentials will enhance its access to capital and markets. The company's pledge to achieve net-zero emissions by 2050 aligns with international climate goals, reducing regulatory risk and attracting ESG-focused investors.

A Must-Own in the Metals and Mining Sector

The case for Nexa is clear. Its operational execution at Aripuanã and Cajamarquilla has translated into robust financial performance, while its deleveraging strategy ensures resilience. The 4.77% pre-market stock surge following Q3 results, noted in the earnings call transcript, reflects market confidence in these fundamentals. Moreover, Nexa's alignment with zinc demand trends-driven by infrastructure and green energy transitions-positions it as a beneficiary of structural growth.

For investors, the question is not whether to own Nexa but how much. In a sector where many peers struggle with legacy costs or environmental liabilities, Nexa's combination of operational agility, financial prudence, and sustainability leadership is rare. As the global economy pivots toward a low-carbon future, Nexa Resources stands out as a high-conviction buy.