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Ternium (TX)
:TX
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Ternium SA
(NYSE:TX)67Neutral
Ternium SA (TX) vs. S&P 500 (SPY)
Market Cap
$6.16B
Dividend Yield9.88%
Average Volume (3M)301.35K
Price to Earnings (P/E)73.5
Beta (1Y)0.73
Revenue Growth17.34%
EPS Growth-71.47%
CountryUS
Employees34,458
SectorBasic Materials
Sector Strength56
IndustrySteel
Share Statistics
EPS (TTM)-0.27
Shares Outstanding196,307,680
10 Day Avg. Volume313,900
30 Day Avg. Volume301,351
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.36
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$41.75Price Target Upside33.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Ternium SA Business Overview & Revenue Model
Company DescriptionTernium SA is a leading steel manufacturing company operating primarily in Latin America. It is involved in the production and distribution of a broad range of steel products, including flat and long steel, as well as high value-added products such as pre-painted and galvanized steel. The company serves a diverse array of industries, including construction, automotive, home appliances, and energy, providing high-quality and durable steel solutions tailored to meet its clients' specific needs.
How the Company Makes MoneyTernium SA generates revenue through the sale of its extensive range of steel products. Its primary revenue streams include the production and distribution of flat steel products, such as hot-rolled, cold-rolled, and coated steel, as well as long steel products like bars and wire rods. The company leverages its integrated manufacturing process, which includes raw material extraction and steel processing, to maintain cost efficiency and competitive pricing. Ternium also benefits from strategic partnerships and its geographic presence in key markets, which enhance its distribution capabilities and market reach. Additionally, the company's focus on technological advancement and innovation in steel production contributes to its revenue by meeting the evolving demands of industries requiring high-performance materials.
Ternium SA Financial Statement Overview
Summary
Ternium SA demonstrates strong financial stability with a solid balance sheet and healthy revenue growth. However, declines in profitability and cash flow efficiency, such as a significant drop in net profit margin and free cash flow, present challenges.Income Statement
Ternium SA shows a strong gross profit margin and consistent revenue growth over the years, though there is a notable decline in net profit margin recently. The TTM (Trailing-Twelve-Months) gross profit margin is healthy at approximately 17.66%, and the revenue growth rate from the previous year is around 5.59%. However, the TTM net profit margin has significantly decreased to around 0.46% due to lower net income, which is a concern for profitability.75
Positive
Balance Sheet
The balance sheet reflects a solid equity position, with a debt-to-equity ratio of approximately 0.20, indicating low leverage and strong financial stability. The equity ratio stands at about 49.83%, showcasing a strong capital structure. However, the return on equity (ROE) has dropped significantly to 0.72% in the TTM, which could impact investor returns if not improved.80
Positive
Cash Flow
Ternium SA exhibits a strong operating cash flow relative to net income, with a TTM operating cash flow to net income ratio of 29.62. However, free cash flow has decreased notably from the previous year, affecting the free cash flow growth rate negatively. Additionally, the free cash flow to net income ratio is 5.44, which indicates room for improvement in cash generation efficiency.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 18.59B | 17.61B | 16.41B | 16.09B | 8.74B | 10.19B | Gross Profit |
| 3.28B | 5.26B | 3.93B | 6.20B | 1.64B | 1.74B | EBIT |
| 1.61B | 2.20B | 2.70B | 5.27B | 1.08B | 864.57M | EBITDA |
| 1.74B | 2.21B | 3.33B | 5.96B | 1.77B | 1.53B | Net Income Common Stockholders |
| 85.69M | 676.04M | 1.77B | 3.83B | 778.47M | 564.27M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.83B | 3.82B | 3.53B | 2.57B | 1.35B | 732.17M | Total Assets |
| 24.24B | 24.18B | 17.49B | 17.10B | 12.86B | 12.94B | Total Debt |
| 2.39B | 1.47B | 1.27B | 1.74B | 2.02B | 2.53B | Net Debt |
| 542.86M | -371.37M | -382.31M | 462.11M | 1.48B | 2.01B | Total Liabilities |
| 7.39B | 7.37B | 3.72B | 4.86B | 4.41B | 5.22B | Stockholders Equity |
| 12.45B | 12.42B | 11.85B | 10.54B | 7.29B | 6.61B |
| Cash Flow | Free Cash Flow | ||||
| 466.23M | 1.04B | 2.17B | 2.15B | 1.20B | 595.37M | Operating Cash Flow |
| 2.54B | 2.50B | 2.75B | 2.68B | 1.76B | 1.65B | Investing Cash Flow |
| -1.87B | -1.47B | -1.32B | -1.05B | -1.18B | -1.20B | Financing Cash Flow |
| -713.76M | -766.36M | -1.02B | -854.38M | -506.25M | -150.51M |
Ternium SA Technical Analysis
Positive
31.36
Price Trends
29.52
Positive
31.29
Positive
33.40
Negative
Market Momentum
0.10
Negative
61.40
Neutral
93.95
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TX, the sentiment is Positive. The current price of 31.36 is above the 20-day moving average (MA) of 29.86, above the 50-day MA of 29.52, and below the 200-day MA of 33.40, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 61.40 is Neutral, neither overbought nor oversold. The STOCH value of 93.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TX.
Ternium SA Risk Analysis
Ternium SA disclosed 47 risk factors in its most recent earnings report. Ternium SA reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ternium SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $15.01B | 18.05 | 11.71% | 1.52% | -6.56% | -31.89% | |
73 Outperform | $28.64B | 19.97 | 2.60% | 1.28% | -8.56% | 71.92% | |
73 Outperform | $30.83B | 15.80 | 9.79% | 1.62% | -11.46% | -53.29% | |
72 Outperform | $18.81B | 12.72 | 17.27% | 1.47% | -6.68% | -32.96% | |
67 Neutral | $6.16B | 73.52 | -0.44% | 9.88% | 17.34% | -71.47% | |
52 Neutral | $8.16B | 23.18 | 3.43% | 0.55% | -13.48% | -56.94% | |
47 Neutral | $2.64B | -4.00 | -31.55% | 3.33% | 2.93% | -29.90% |
* Basic Materials Sector Average
Performance Comparison
TX
Ternium SA
31.36
-5.86
-15.74%
MT
ArcelorMittal
33.15
7.43
28.89%
NUE
Nucor
133.72
-48.42
-26.58%
RS
Reliance Steel
288.93
-24.19
-7.73%
STLD
Steel Dynamics
125.03
-3.01
-2.35%
X
United States Steel
36.23
-10.63
-22.68%
Ternium SA Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -0.03% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlights Ternium's strong financial position and strategic advancements, such as downstream expansion and renewable energy projects. However, this is countered by significant challenges, including trade uncertainties, market weaknesses in key regions, and the impact of increased Chinese steel exports. Overall, the sentiment is balanced with both positive developments and notable challenges.Highlights
Strong Financial Position
Ternium reported shipments of 16 million tons for 2024 with an adjusted EBITDA of $2 billion on a 12% margin. The company's net cash position remains strong at $1.6 billion by the end of December, even with significant CapEx and dividend payouts.
Downstream Expansion Progress in Mexico
Significant progress on the downstream expansion project in Mexico, including the start of operations at the pickling line and finishing center. Two remaining lines are under construction, with planned startups by the end of 2025.
Wind Farm Initiative in Argentina
The wind farm in Argentina began generating energy, expected to deliver approximately 480 gigawatt-hours per year, providing substantial economic benefits and assisting in decarbonization goals.
Operational Improvement in Brazil
Brazil experienced a positive year with a 10% increase in flat steel consumption and vehicle production. Usiminas achieved significant operational improvements, producing 3.2 million tons of crude steel.
Educational Initiatives
Ternium opened the Roberto Roca Technical School in Brazil, providing high-quality technical education and scholarships to students, reflecting the company's commitment to community development.
Lowlights
Trade Uncertainties and Challenges
A surge in US trade actions has created substantial uncertainty in the global market, particularly affecting Mexico and Canada, with potential impacts on the steel industry.
Market Weakness in Mexico
Shipments in Mexico decreased due to weaker-than-expected commercial market activity and weak government infrastructure investment.
Significant Steel Imports from China
China's increased steel exports have significantly disrupted markets, particularly in Brazil, where imports from China accounted for approximately 80% of flat steel imports.
Decline in Argentina's Shipments
Argentina experienced a year-over-year shipment decline of approximately 20%, primarily due to macroeconomic measures aimed at addressing economic imbalances.
Decreased EBITDA and Net Income
Adjusted EBITDA decreased due to lower realized prices and reduction in shipments. The net income decline was affected by foreign exchange results and the depreciation of the Brazilian real.
Company Guidance
During the Ternium Fourth Quarter 2024 Results Conference Call, the company reported shipments of 16 million tons for the year, generating an adjusted EBITDA of $2 billion with a margin of 12%. Despite a challenging year for the steel industry, Ternium maintained a robust net cash position of $1.6 billion at the end of December 2024, even with capital expenditures nearing $2 billion and dividends paid exceeding $600 million. The call highlighted significant progress in Ternium's downstream expansion project in Mexico, including the operational startup of the pickling line and finishing center in Pesqueria, with ongoing construction of a cold rolling mill and a hot-dip galvanized line slated for completion by December 2025. Additionally, Ternium's wind farm in Argentina began generating energy, with 22 wind turbines installed and an expected annual output of 480 gigawatt-hours. The company expressed optimism about navigating potential trade uncertainties, emphasizing the importance of the USMCA in maintaining competitiveness and integration in the North American market. Furthermore, Ternium announced a proposed annual dividend of $2.70 per ADS, reflecting a dividend yield of approximately 9%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.