We recently published a list of 10 Most Oversold Canadian Stocks to Buy According to Analysts. In this article, we are going to take a look at where Ero Copper Corp. (NYSE:ERO) stands against other most oversold Canadian stocks to buy according to analysts.
Canada’s Retaliation to US Tariffs
On March 12, CNBC reported that after the European Union, Canada also announced that it would impose retaliatory tariffs on US goods. Canada has imposed a 25% tariff, mainly targeting steel and aluminum, but will also hit some of the other US exports, including computers, sports equipment, and cast iron products. CNBC’s Megan Cassella while analyzing this move mentioned that the economic impact of these tariffs can be estimated beforehand as this is very similar to President Trump’s first term when he imposed similar tariffs. She noted that President Trump had imposed similar tariffs in 2018, but later had to carve out many countries because of the economic impact. Although there was some modest help for the local aluminum producers back in 2018, however, all steel and aluminum users were impacted and as a result the overall net economic impact was negative.
While quoting research by the Federal Reserve, Cassella noted that tariffs boosted employment in manufacturing by around 0.3%. However, the rising input cost dragged down the same sector employment by around 1.1% and retaliation pulled it down another 0.7%. Therefore the net economic impact at the end was recorded to be -1.4% to the sector, which accounts for a direct loss of around 75,000 manufacturing jobs. Moreover, economists at the Peterson Institute estimated that there was a cost of about $900,000 for every job saved or created in the steel industry. Cassella further elaborated that as of yet the goal of these tariffs remains unclear, due to which the consumers and the manufacturers in the industry are confused as well.
READ ALSO: Top 12 Extreme Value Stocks to Invest In Right Now and 10 Best Growth Stocks to Invest in for the Next 10 Years.
On the other hand, these tariffs add to the economic challenges Canada is facing which include slower population growth, federal policy ambiguity, and inflation. According to Deloitte’s January 2025 Canadian economy forecast, the economy is anticipated to remain positive with 2% GDP growth expected during the year. While the outlook by Deloitte has not factored in the economic impact of US tariffs, it suggests that the government would have to lean in to support the business and local production to fight off the impact of tariffs and enhance productivity.
Our Methodology
To compile the list of the 10 most oversold Canadian stocks to buy according to analysts, we used the Finviz stock screener and CNN. Using the screener we aggregated a list of Canadian stocks that have fallen by more than 25% over the past 6 months but analysts see more than 25% upside. We cross-checked the upside potential from CNN and ranked the stocks based on this metric, in ascending order. Please note that the data was recorded on March 13, 2025. Additionally, we have included the hedge fund sentiment around each stock.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A drilling rig in the middle of an industrial mining site, surrounded by rugged terrain.
Ero Copper Corp. (NYSE:ERO)
6-Month Performance: -41.24%
Number of Hedge Fund Holders: 15
Analyst Upside Potential: 39.92%
Ero Copper Corp. (NYSE:ERO) is a Canadian mining company that focuses on the exploration, development, and mining of mineral properties primarily in Brazil. The company operates several mines in Brazil, including the Caraiba Operations in Bahia State, the Xavantina Operations in Mato Grosso State, and the Tucuma Operation in Para State.
On March 7, Analyst Guilherme Rosito from Bank of America Securities maintained a Buy rating on the stock with a C$26.00 price target. The analyst noted that despite missing EBITDA expectations in recent quarterly results, he sees significant growth potential, particularly with the ramp-up of operations at the Tucuma site. This is expected to improve production levels in the coming quarters. Rosito is also optimistic about Ero Copper Corp.’s (NYSE:ERO) ability to leverage the favorable copper market outlook.
During the fiscal fourth quarter of 2024, the company delivered record copper production which resulted in a strong financial performance. Its full-year copper production reached 40,600 tonnes in concentrate. Moreover, as a result of higher metal prices and stronger operating margins, the year led to increased cash flow from operations of $60.8 million for the quarter and $145.4 million for the year. It is one of the most oversold Canadian stocks to buy according to analysts.
Overall, ERO ranks 9th on our list of best growth stocks to invest in for the next 10 years. While we acknowledge the potential of ERO as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ERO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.