Nexa Resources: Despite price headwind, JPM positive on growth opportunity
03/09/2019 19:16
** JP Morgan cuts PT on specialty mining and metals firm
Nexa Resources NEXA.N to $12 from $13, but retains
'overweight' rating on stock
** Says while Chinese smelting capacity startups remain a
risk to zinc prices in the short term, it expects Chinese fiscal
stimulus roll-over into 2H19 to support steel demand by year end
** Says despite the recent zinc price headwind, it has a
positive stance on Nexa, mainly driven by co's attractive growth
opportunity
** Co has 7 new projects in the pipeline, which brokerage
says should bridge its smelting capacity surplus and support
better margins in the long term
** JPM further says an unexpected upside to global zinc
output in the coming years as well as a deceleration in demand
could impact zinc prices negatively
** Zinc prices have suffered this year as sentiment on
global demand growth deteriorated following trade war
escalations - brokerage
** 5 of 10 brokerages rate the stock "buy", 4 "hold" and 1
"sell"; median PT is $13.25
** Stock down ~21% YTD
(Reporting By Arundhati Sarkar in Bengaluru)
((arundhati.sarkar@thomsonreuters.com))