Nexa Resources’ shares rose by 6.2% to $9.4 in the last trading session, with a higher-than-average trading volume. This follows a 31.1% increase over the past four weeks, coinciding with Nexa completing the sale of its Otavi Project in Namibia to Midnab Resources.<\/p>\n
Nexa Resources aims to prioritise profitable assets, enhance free cash flow, and adhere to its capital allocation strategy. Namibia remains a focus for expanding copper exploration for Nexa, beyond its usual Latin American projects.<\/p>\n
The company anticipates quarterly earnings of $0.35 per share, a 135% improvement from the previous year. Expected revenues for the upcoming report stand at $828.12 million, showing an 11.8% increase from last year.<\/p>\n
Empirical research indicates a correlation between earnings estimate revisions and stock price trends. Nexa’s consensus EPS estimate for the quarter has risen 25% in the last 30 days, suggesting potential for further gains.<\/p>\n
In the same industry, Globe Specialty Metals closed 0.8% lower at $4.72, returning 13.6% over the past month. Globe’s EPS estimate remains unchanged at -$0.07, reflecting a -333.3% change from last year, while its Zacks Rank is #4 (Sell).<\/p>\n
Given the strong upward momentum and the 31.1% gain over the past four weeks, we should consider this a bullish signal for Nexa Resources. The market is clearly rewarding the company’s strategy of focusing on profitable assets, as shown by the recent sale of its Otavi Project. The upcoming earnings report is a major catalyst, especially with consensus estimates being revised 25% higher in the last month.<\/p>\n
Considering today is December 29, 2025, we should look at option contracts expiring after the next earnings announcement, likely in late February 2026. The recent price jump on high volume suggests that implied volatility is elevated, making call options more expensive. We see implied volatility on NEXA’s front-month options has climbed to over 55%, significantly above its historical average.<\/p>\n
This bullish sentiment is supported by underlying commodity markets, which is crucial for a mining company. We have seen zinc futures on the London Metal Exchange recently push past $3,800 per tonne, a level we last saw in the third quarter of 2025. Copper prices have also remained firm, with recent data showing exchange inventories have declined by 8% over the last month.<\/p>\n
This situation feels similar to the run-up we observed in base metal producers back in early 2024, when strong industrial forecasts led to a sector-wide re-rating. It’s also important to note that this strength appears specific to NEXA, as peer Globe Specialty Metals continues to see negative earnings revisions. This divergence suggests we are backing a company with strong fundamentals, not just a rising tide.<\/p>\n
With the stock at $9.40, selling cash-secured puts with a strike price around $9 for the February or March 2026 expiration could be a viable strategy. This approach allows us to collect premium while benefiting from the high implied volatility. Alternatively, a bull call spread would allow for upside participation while defining our risk in case the earnings report disappoints.<\/p>\n","protected":false},"excerpt":{"rendered":"
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