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Ero Copper
(TSX:ERO)
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Rating:73Outperform
Price Target:
C$51.00
▼(-6.40% Downside)
Action:Reiterated
Date:08/10/26
The score is driven primarily by improved financial performance (strong TTM profitability, better leverage, and a return to positive free cash flow) and a constructive earnings update highlighting strong cash generation and deleveraging. Technicals are supportive but overextended (RSI/Stoch high), and valuation is only moderately supportive given a reasonable P/E but no dividend yield data.
Positive Factors
Cash Generation and Deleveraging
Strong operating cash flow is funding debt reduction and improving financial resilience. Lower leverage should reduce balance-sheet pressure, preserve liquidity for mine investment, and give Ero greater flexibility through the next several months of operating and commodity-price variability.
Negative Factors
Cyclical Earnings Volatility
The sharp shift from loss to strong profit demonstrates meaningful earnings sensitivity across the metals cycle. This volatility makes future cash generation and returns harder to forecast, and weaker operating conditions could again pressure margins, leverage, and the pace of capital investment.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash Generation and Deleveraging
Strong operating cash flow is funding debt reduction and improving financial resilience. Lower leverage should reduce balance-sheet pressure, preserve liquidity for mine investment, and give Ero greater flexibility through the next several months of operating and commodity-price variability.
Read all positive factors
Ero Copper (ERO) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$5.51B
Dividend YieldN/A
Average Volume (3M)405.39K
Price to Earnings (P/E)11.7
Beta (1Y)2.41
Revenue Growth93.28%
EPS Growth113.62%
CountryCA
Employees3,690
SectorBasic Materials
Sector Strength58
IndustryCopper
Share Statistics
EPS (TTM)2.98
Shares Outstanding104,302,635
10 Day Avg. Volume386,580
30 Day Avg. Volume405,393
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)3.14
Price to Sales (P/S)3.67
P/FCF Ratio32.14
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$52.22Price Target Upside-4.16% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)3.99
Revenue Forecast (FY)C$1.26B
Ero Copper Business Overview & Revenue Model
Company Description
Operating in Brazil, Ero Copper Corp. specializes in the exploration, development, and production of base metals. The company's core business involves mining and selling copper concentrate from its MCSA Mining Complex, located in northeastern Bahi...
How the Company Makes Money
Ero Copper makes money primarily by producing and selling copper concentrate generated from its mining and processing operations in Brazil. Revenue is recognized based on the sale of produced concentrate to customers, with realized pricing largely...
Ero Copper Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive operational and financial momentum: strong quarter-on-quarter cash flow and EBITDA growth, meaningful deleveraging (net debt leverage down to ~0.8x), increased copper throughput and filtration progress at Tucumã, a sharp QoQ recovery in Xavantina gold production, and material progress on the Furnas drill program. Challenges include a slower Xavantina start pushing gold production toward the low end of guidance, sensitivity of reported unit costs to a stronger BRL and inflation (partially offset by hedges below the line), remaining revolver repayments, and some project timing uncertainty (Caraíba shaft). Overall, the positive operational improvements, cash generation and balance sheet repair outweigh the highlighted risks.Positive Updates
Strong Quarter Financials — Cash Flow and EBITDA Growth
Cash flow from operations increased nearly 50% quarter-on-quarter to approximately $138 million; adjusted EBITDA rose to $144 million for Q2. First-half cash flow from operations improved to ~$231 million from $156 million (+~48%), and first-half adjusted EBITDA increased to $269 million from $146 million (+~84%). Quarterly revenue was $284.3 million, up 8% from Q1.
Negative Updates
Slower Start at Xavantina — Production Guidance Impact
A slower start to the year at Xavantina means mine gold production is now expected at the low end of maintained guidance for the full year, prompting an update to full-year mined gold C1 cash cost guidance to $1,100–1,350/oz and AISC guidance to $2,200–2,700/oz.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Quarter Financials — Cash Flow and EBITDA Growth
Cash flow from operations increased nearly 50% quarter-on-quarter to approximately $138 million; adjusted EBITDA rose to $144 million for Q2. First-half cash flow from operations improved to ~$231 million from $156 million (+~48%), and first-half adjusted EBITDA increased to $269 million from $146 million (+~84%). Quarterly revenue was $284.3 million, up 8% from Q1.
Read all positive updates
Company Guidance
Ero reiterated it is positioned to meet full‑year copper guidance with stronger H2 production and sequentially lower consolidated C1 costs (Q2 copper production 17,315 tonnes at consolidated C1 $2.42/lb); Xavantina is expected to deliver materially higher mining rates, throughput and mine gold production in H2 (≈65% of full‑year mine gold in H2) though mine gold is now expected at the low end of prior guidance, with updated full‑year Xavantina mined gold C1 of $1,100–$1,350/oz and AISC of $2,200–$2,700/oz. Consolidated capex guidance was increased $10M to $285–$330M to include a new power line (potential incremental capex FX/inflation impact ~$20–$25M, largely offset by hedges); the hedge program protects ~70% of consolidated FY BRL exposure at an average floor of BRL 5.54, delivered $13M of realized gains in Q2 ($20M H1) and is expected to add another $20–$25M (full‑year ~$40–$45M) assuming BRL 5.10. Management estimates persistent currency/inflation could add ~ $0.10/lb to consolidated copper C1 and ~ $100/oz to Xavantina mined gold C1. Financially, Q2 cash flow from operations was ≈$138M and adjusted EBITDA $144M (H1 cash flow ≈$231M, H1 adj. EBITDA $269M), net debt was ≈$453M (down ~$38M in Q2 and ≈$100M over 18 months) with net‑debt/adj‑EBITDA ≈0.8x, liquidity ≈$182M (cash ≈$102M + revolver availability ≈$80M), and $60M repaid on the revolver in 2026 with ~$95M remaining.Ero Copper Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
74
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.05B | 799.60M | 470.26M | 427.48M | 426.39M | 489.92M |
| Gross Profit | 448.54M | 345.51M | 180.55M | 156.84M | 187.18M | 318.86M |
| EBITDA | 572.52M | 410.40M | 13.78M | 208.15M | 206.48M | 289.80M |
| Net Income | 310.66M | 268.34M | -68.47M | 92.80M | 101.83M | 201.05M |
Balance Sheet | ||||||
| Total Assets | 2.16B | 1.92B | 1.46B | 1.51B | 1.19B | 689.76M |
| Cash, Cash Equivalents and Short-Term Investments | 101.74M | 105.25M | 50.40M | 111.74M | 317.40M | 130.13M |
| Total Debt | 573.36M | 631.20M | 620.07M | 445.84M | 429.02M | 66.36M |
| Total Liabilities | 937.25M | 984.22M | 866.95M | 702.36M | 645.91M | 294.27M |
| Stockholders Equity | 1.21B | 933.83M | 587.13M | 804.25M | 538.59M | 393.06M |
Cash Flow | ||||||
| Free Cash Flow | 153.47M | 91.22M | -192.17M | -297.55M | -152.43M | 182.76M |
| Operating Cash Flow | 444.20M | 358.57M | 145.42M | 163.10M | 143.39M | 364.59M |
| Investing Cash Flow | -303.39M | -283.47M | -335.38M | -308.17M | -425.81M | -179.53M |
| Financing Cash Flow | -99.66M | -17.29M | 131.16M | 77.75M | 327.30M | -115.43M |
Ero Copper Technical Analysis
Neutral
54.49
Price Trends
43.47
Positive
41.18
Positive
40.43
Positive
Market Momentum
1.70
Positive
49.66
Neutral
44.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ERO, the sentiment is Neutral. The current price of 54.49 is above the 20-day moving average (MA) of 50.56, above the 50-day MA of 43.47, and above the 200-day MA of 40.43, indicating a neutral trend. The MACD of 1.70 indicates Positive momentum. The RSI at 49.66 is Neutral, neither overbought nor oversold. The STOCH value of 44.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ERO.
Ero Copper Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
86 Outperform | C$31.88B | 14.09 | 22.97% | 0.32% | 28.67% | ― | |
80 Outperform | C$17.69B | 15.77 | 18.43% | 0.08% | 13.43% | 129.98% | |
73 Outperform | C$5.51B | 11.72 | 30.09% | ― | 93.28% | 113.62% | |
72 Outperform | C$12.27B | 17.08 | 13.69% | ― | 36.25% | 524.95% | |
63 Neutral | C$4.51B | 964.85 | 1.33% | ― | 68.28% | ― | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | C$38.62B | -290.38 | -0.73% | 0.63% | 15.02% | -140.36% |
* Basic Materials Sector Average
TSE:ERO
Ero Copper
48.37
24.97
106.71%
TSE:HBM
Hudbay Minerals
36.86
18.13
96.77%
TSE:TKO
Trekor Metals
11.11
6.17
124.90%
TSE:LUN
Lundin Mining
34.50
18.17
111.20%
TSE:CS
Capstone Copper
14.53
4.17
40.25%
TSE:FM
First Quantum Minerals
42.95
16.63
63.18%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.