Ero Copper Surges 135% in the Past Year: What's Driving the Momentum?

Ero Copper Corp. ERO has gained a whopping 135.3% over the past year compared with the Zacks Mining-Non Ferrous industry’s 90.9% increase and the S&P 500’s modest 17.7% rise.  

Among its peers, Freeport-McMoRan, Inc. FCX and Southern Copper Corp. SCCO are up 66.7% and 111% in the past year, respectively. 

Technical indicators show that ERO has been trading above the 50-day and 200-day simple moving average (SMA). The 50-day SMA is reading higher than the 200-day SMA, indicating a bullish trend. 

Let’s look at the ERO’s fundamentals to analyze the stock better. 

ERO's Record Production Highlights Operational Strength

Ero Copper delivered strong operational performance in the fourth quarter of 2025, with record consolidated copper production reflecting the continued ramp-up of its Brazilian mining portfolio and progress across key assets. During the quarter, the company produced 19,706 tons of copper in concentrate, with 10,431 tons coming from its established Caraíba Operations. Mill throughput increased around 15% from the prior quarter, although lower mined grades modestly pressured costs.  

The Tucumã Operation, which had achieved commercial production effective July 1, 2025, contributed 9,275 tons of copper, driven by improved processing rates and plant throughput, up about 22% sequentially.  

Financial Flexibility Underpins Ero Copper's Growth Outlook

Ero Copper maintains a healthy liquidity profile supported by strong internal cash generation and available borrowing capacity. The company ended the third quarter of 2025 with $66.3 million in cash and cash equivalents, a substantial 230% improvement year over year, complemented by $45.0 million of undrawn availability under its senior revolving credit facility. The company had a total liquidity of roughly $111 million to fund operations, development spending and working capital needs.  

Operationally, higher copper output and favorable realized prices translated into robust cash generation, with cash flow from operating activities reaching approximately $110.3 million during the quarter, a substantial improvement year over year from $53 million, translating into free cash flow of $34 million. We expect the higher copper production levels in the fourth quarter, as well as higher copper prices seen through the quarter, to reflect on the company’s results scheduled to be announced on March 5, 2026. 

ERO's Strategic Expansion Across Brazilian Portfolio

Ero Copper’s growth and expansion program in 2025 is focused on transforming its Brazilian asset base into a higher-output, longer-life mining platform through a mix of commissioning new capacity, developing existing mines, mechanizing operations and advancing exploration. A key element of this strategy has been the commercial ramp-up of the Tucumã Operation, which reached commercial production in mid-2025 and is stepping toward design mill throughput to drive incremental copper volumes and improve unit costs. 

At its flagship Caraíba Operations, the company is investing in underground development and the construction of a new external shaft at the Pilar Mine, intended to improve operational flexibility and support access to deeper, higher-grade ore zones, with handover expected in 2027. These efforts are anchored by capital programs that also include mill capacity expansions and in-mine exploration to extend mine life.  

At Xavantina, mechanization is boosting development and throughput, while mine-life extension studies and initial gold concentrate sales support higher output and diversification. Ero is also advancing the Furnas Copper-Gold Project through drilling and feasibility work to potentially add another meaningful copper and gold source. 

ERO’s Rising Earnings Estimates Reflect Positive Sentiments

The Zacks Consensus Estimate for 2025 for ERO has been revised lower over the past 60 days. The same for 2026 has been trending higher over the same period. 

The Zacks Consensus Estimate for ERO’s fiscal 2025 earnings is pegged at $2.13 per share, suggesting year-over-year growth of 173.1%. For 2026, earnings are estimated at $4.29 per share, implying 101.2% growth year-over-year. 

ERO is Trading Below Industry

ERO is currently trading at a forward 12-month price-to-earnings multiple of 3.09X, above the peer group average of 5.32X and its five-year median.  

The forward 12-month price-to-earnings multiples for Freeport and Southern Copper are 3.29X and 11.23X, respectively. ERO and FCX currently have a Value Score of B, while SCCO has a score of D.  

Final Thoughts: Buy Ero Copper

Ero Copper delivered record production as its Brazilian operations ramped up smoothly, driving higher throughput, lower costs and stronger margins. Improving operational efficiency across both legacy and new mines is translating into healthy cash generation and consistent free cash flow. A strengthened liquidity position, low leverage and available credit provide ample flexibility to fund expansion without balance sheet strain, reducing risk while supporting growth. 

Despite this momentum, the stock remains attractively valued relative to its rising output, expanding asset base and long-term earnings potential, leaving room for upside as execution continues. With strong operations, a clean balance sheet and visible growth catalysts, Ero Copper stands out as a must-buy for investors seeking quality copper exposure. 

ERO carries a Zacks Rank of #1 (Strong Buy). 

You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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