TD note 10:14 AM EDT, 10/19/2022 (MT Newswires) -- Ero Copper Corp. (ERO.TO) was downgraded to Hold from Buy at TD Securities on Wednesday.
Analyst Craig Hutchison maintained a price target of $16.50 on shares of the Vancouver-based miner with operations in Brazil.
Hutchison said Ero shares have risen 48% since the start of the third quarter - outpacing TD's broader base metals universe, which has gained an average of 6% in the same period.
"Ero is focused on an organic growth strategy to more than double copper production between 2021 and 2025," the analyst said in a note to clients. "This strategy includes the plan to ramp-up throughput at the Caraiba mill, develop the Deepening Extension Zone at Pilar, and construct the Tucuma open-pit copper development project."
"All three initiatives are well-underway and are expected to result in a high capital intensity over the next two years," Hutchison said. "We believe Ero's shares could come under pressure during this capital-intensive period, and we expect the focus of Q3/22 results to be centred on the company's ability to mitigate inflationary pressure."
Ero shares declined $0.59, or 3.7%, to $15.48 on the Toronto Stock Exchange Wednesday.