Nexa Resources has delivered a very strong 1 year share price gain, yet current checks that include an intrinsic value estimate and market multiples still point to the stock trading below what its cash flows and earnings may justify. With a major change in control pending through Boliden AB's planned acquisition, investors are weighing how this mix of strong recent returns and signals of undervaluation fits together.
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Over the past year, Nexa Resources has returned 187.8%, which puts recent momentum firmly on the side of existing shareholders while also raising the question of how much upside is left.
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The agreed US$1.3b deal for Boliden AB to acquire a 64.68% controlling stake, followed by a planned tender offer for remaining shares, can support Nexa Resources' valuation, while execution and regulatory risks around closing the transaction may limit how quickly that value is realized.
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On broader checks Nexa Resources presents a mixed picture rather than a clear bargain or clear overvaluation, with a value score of 4 out of 6 and both the Discounted Cash Flow (DCF) intrinsic value estimate and earnings multiples suggesting the shares are below their estimated worth.
The issue now is whether Nexa Resources' current price already reflects the proposed Boliden transaction and recent share price gains, or if there is still a meaningful gap to the intrinsic value implied by its cash flows and earnings power.
Compare Nexa Resources' surge and pending takeover with other potential opportunities by scanning the hand picked 46 high quality undervalued stocks that may still trade below their estimated worth.
Is Nexa Resources Still Cheap on Cash Flow?
The Discounted Cash Flow (DCF) model here looks at Nexa Resources through its projected cash flows to shareholders. On the latest figures, Nexa Resources generated about $120.5 million of free cash flow over the last twelve months. Analyst and model projections assume recovering cash flows over the next few years, which supports an estimated intrinsic value of about $16.47 per share.
That estimate sits above the current share price, which implies the stock trades at roughly a 15.6% discount to this DCF value and screens as undervalued on cash flows alone. The agreed Boliden deal at $15.29 per share for the controlling stake helps anchor expectations, yet the DCF output still points to additional upside relative to that reference price. The recent acquisition terms give a useful reference point, but the cash flow model suggests Nexa Resources still looks undervalued based on its projected earnings power.
Our Discounted Cash Flow (DCF) analysis suggests Nexa Resources is undervalued by 15.6%. Track this in your watchlist or portfolio , or discover 46 more high quality undervalued stocks .
Is Nexa Resources Still Cheap on Earnings?
The P/E ratio suits Nexa Resources because earnings are a core focus for many investors in the Metals and Mining sector. Nexa Resources currently trades on a P/E of 6.6x, which is well below both the global Metals and Mining average of 21.7x and a peer average of 56.6x. That suggests the stock is priced on a much lower earnings multiple than many comparable companies.
A more tailored check that looks at Nexa Resources' growth profile, profitability, size and risk implies a fair P/E of about 15.5x. Compared with the current 6.6x, the market is applying a heavy discount to those earnings. This gap is consistent with earlier cash flow analysis that indicated value support, even after the agreed Boliden transaction price helped reset expectations around the stock.
On the P/E multiple, Nexa Resources appears undervalued, with its current earnings rating sitting well below the indicated fair ratio.
See what the numbers say about this price — find out in our valuation breakdown.
The Nexa Resources Narrative: What Would Justify Today's Price?
Simply Wall St Narratives for Nexa Resources pick up where the valuation checks stop. They spell out the specific paths for Nexa Resources' growth, margins and earnings that would need to play out for the stock to be worth materially more or less than today's price, and they sit on the company's Community page. Where a single ratio or model gives one figure, these Narratives describe the future that figure rests on so you can watch how it unfolds over time.
Community views on Nexa Resources sit far apart, with some investors focused on cash flow torque and others more worried about execution risk and balance sheet stretch.
Bull case: 7% undervalued
"Nexa is one of the cheaper ways to gain exposure to zinc and related base metals, but the investment case is stronger than a simple commodity beta trade..."
Read the full Bull Case to see why Nexa Resources could be undervalued
Bear case: roughly fairly valued
"The plan to reduce gross debt by about US$500 million to US$600 million over roughly four years, while maintaining CapEx of around US$347 million and exploration and evaluation spend of US$88 million for 2025 and a similar level indicated for 2026, could constrain financial flexibility if metal prices or working capital benefits soften..."
Read the full Bear Case to see why Nexa Resources could be overvalued
Do you think there's more to the story for Nexa Resources? Head over to our Community to see what others are saying!
The Bottom Line
Nexa Resources still screens as undervalued on both Discounted Cash Flow (DCF) and earnings multiples, even after the recent move and the agreed Boliden terms. The intrinsic value estimate points to a discount, while the current P/E leaves plenty of gap to the indicated fair ratio. With broader checks sending a mixed rather than emphatic signal, the key question is whether the market is correctly pricing execution and balance sheet risks or being too cautious. The crux for investors is whether future progress is enough to close that valuation gap or if Nexa Resources remains cheap for a reason.
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.
Companies discussed in this article include NEXA .
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