A Look at Ero Copper (TSX:ERO) Valuation Following Tucumã Launch and 2024 Sustainability Progress

Ero Copper (TSX:ERO) has been in the spotlight following the release of its 2024 Sustainability Report and the announcement that its Tucumã Operation safely began commercial production in July 2025, signaling key operational progress.

See our latest analysis for Ero Copper.

Ero Copper’s recent operational wins, including a successful start at the Tucumã Operation and topping earnings estimates for the second quarter, have energized investor sentiment. That momentum is clear in the numbers, with a 37.1% one-month share price return and a total shareholder return of nearly 110% over the past three years, even after factoring in a brief pullback this week. As confidence grows around higher copper output and production scale, it appears the market is beginning to price in more of Ero’s long-term growth story.

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With shares rallying over 37% in just a month and investors eyeing Ero Copper’s impressive growth, the real question now is whether the recent run leaves more upside. Could this be a genuine buying opportunity, or is future growth already priced in?

Most Popular Narrative: 16% Overvalued

With Ero Copper's fair value estimate from the most closely followed narrative now at $27.71, shares trade above this level following their latest close at $32. This gap puts the spotlight on what is driving sentiment and sets up a deep dive into the assumptions behind the narrative’s assessment.

*The company is transitioning multiple assets (Tucumã, Xavantina, and Caraíba) to higher production and improved operational consistency after significant foundational upgrades, including mechanization and technology rollouts. These changes are expected to result in higher production volumes and improved cost control in H2 2025 and into 2026, supporting revenue growth and potentially stronger margins.*

Read the complete narrative.

This is not your average valuation story. Behind the scenes are bold production upgrades, new cost controls, and a transformation in operating consistency. Want to know exactly which financial leaps and operational moves shape this fair value? There is a set of aggressive forecasts and industry shifts you will not want to miss. Read on for the full narrative breakdown.

Result: Fair Value of $27.71 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution missteps or further downward revisions to production targets could quickly undermine the market’s confidence in Ero Copper’s positive outlook.

Find out about the key risks to this Ero Copper narrative.

Another View: SWS DCF Model Says Shares Are Deeply Undervalued

While the leading narrative sees Ero Copper as overvalued against its fair value estimate, our SWS DCF model presents a very different perspective. Based on future cash flows, this approach places fair value at CA$80.71, indicating the current price is about 60% below what the model suggests. Is the market missing a significant upside?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Ero Copper Narrative

If you think your perspective differs or would rather dig into the details yourself, you can easily put together your own view in just a few minutes. Do it your way

A great starting point for your Ero Copper research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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