Carlos Peyrelongue, an analyst from Bank of America Securities, reiterated the Hold rating on Cemex SAB. The associated price target was raised to $8.00.
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Carlos Peyrelongue has given his Hold rating due to a combination of factors affecting Cemex SAB’s performance. The company is expected to face challenges in the upcoming quarter, with soft demand in the United States and weak performance in Mexico. These factors are somewhat balanced by stronger results anticipated from Europe. In Mexico, there is a significant decrease in cement volumes, which poses a risk given Cemex’s higher exposure to infrastructure compared to its peers.
Cemex’s cost-cutting initiatives, such as Project Cutting Edge, aim to improve margins and free cash flow, with substantial savings expected by 2027. However, the recent stock rally may already reflect these potential benefits. The company’s valuation, trading at 6.3 times forward EBITDA, is above its five-year average, indicating a balanced view of positive cost-saving measures against potential negatives like high interest rates, tariff threats, and macroeconomic challenges in Mexico. Despite these headwinds, long-term growth prospects remain supported by structural tailwinds in the United States and Mexico.