Nexa Resources (NYSE: NEXA) just got a fresh review from BMO Capital. The firm gave the stock a “Market Perform” rating and set a price target of $6. That means they think Nexa will do okay, not amazing, not terrible. Just okay.

That might not sound exciting, but considering Nexa’s recent challenges, it’s actually pretty decent news. The company has been dealing with low profits from its smelting operations and some delays in getting its Aripuana project running smoothly. Still, analysts see some bright spots.

According to InvestingPro, Nexa has a strong free cash flow yield of 11 per cent. And even though it’s had a tough time, the stock looks undervalued right now. So Wall Street still sees some potential.

$6: Hope or Hype?

In the last quarter of 2024, Nexa made more money than expected, $716 million in revenue compared to the forecast of $698 million. But profits were lower than analysts hoped.

The company has a lot of debt, with a debt-to-equity ratio of 2.28. But they are working on paying it down. Nexa is also selling $500 million in new notes to help refinance older debt that’s due in 2027 and 2028.

Moody’s recently changed their outlook for the company to stable. That’s a good sign that Nexa’s financial health is getting better. They’re also starting a new dividend policy. Shareholders could get up to 20 per cent of free cash flow, with a minimum payout of $0.08 per share.

Don’t Sleep on Nexa

Nexa is one of the major players in Latin America’s mining space. They’ve been doing this for over 65 years and produce zinc, copper, lead and silver. The company has $640 million in cash and access to good credit lines.

But the stock doesn’t have high liquidity, which means it can be hard for big investors to jump in. And Nexa may not turn a profit this year.

Still, there’s a plan in place. If the company sticks to it, this $6 target might just be the start of a slow but steady comeback.