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Ternium SA (TX)
NYSE:TX
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Ternium SA
(NYSE:TX)
Rating:61Neutral
Price Target:
$34.00
▲(10.10%Upside)
Ternium SA (TX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.16B
Dividend Yield11.52%
Average Volume (3M)208.22K
Price to Earnings (P/E)73.5
Beta (1Y)0.56
Revenue Growth-10.20%
EPS Growth-152.18%
CountryUS
Employees33,949
SectorBasic Materials
Sector Strength63
IndustrySteel
Share Statistics
EPS (TTM)0.55
Shares Outstanding196,307,680
10 Day Avg. Volume195,063
30 Day Avg. Volume208,224
Financial Highlights & Ratios
PEG Ratio-1.42
Price to Book (P/B)0.51
Price to Sales (P/S)0.00
P/FCF Ratio-20.51
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue0.10
Enterprise Value/Gross Profit3.06
Enterprise Value/Ebitda1.23
Forecast
1Y Price Target
$37.50Price Target Upside21.44% Upside
Rating ConsensusHold
Number of Analyst Covering2
Ternium SA Business Overview & Revenue Model
Company DescriptionTernium S.A. manufactures, processes, and sells various steel products in Mexico, Argentina, Paraguay, Chile, Bolivia, Uruguay, Brazil, the United States, Colombia, Guatemala, Costa Rica, Honduras, El Salvador, and Nicaragua. It operates through two segments, Steel and Mining. The Steel segment offers slabs, billets and round bars, hot rolled flat products, merchant bars, reinforcing bars, stirrups and rods, tin plate and galvanized products, tubes, beams, insulated panels, roofing and cladding, roof tiles, steel decks, pre-engineered metal building systems, and pig iron products; and sells energy. The Mining segment sells iron ore and pellets. The company also provides medical and social; scrap; and engineering and other services, as well as operates as a distribution company. It serves various companies and small businesses in the construction, automotive, home appliances, agro, packaging, transport, and energy industries. The company was founded in 1961 and is based in Luxembourg City, Luxembourg. Ternium S.A. is a subsidiary of Techint Holdings S.à r.l.
How the Company Makes MoneyTernium S.A. generates revenue primarily through the production and sale of steel products. The company operates a vertically integrated business model, which includes mining operations for raw materials, steel production facilities, and processing plants. This integration allows Ternium to manage costs effectively and ensure a stable supply chain. Key revenue streams include the sale of flat and long steel products, such as hot-rolled, cold-rolled, and coated steel, as well as rebar and wire rod. Ternium serves a diverse customer base across multiple industries, with significant sales in the automotive, construction, and manufacturing sectors. The company also benefits from strategic partnerships and joint ventures that enhance its market reach and operational capabilities. Additionally, Ternium's investment in technology and innovation supports the development of high-value-added products, contributing to its earnings growth.
Ternium SA Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 11.40%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with notable achievements in EBITDA growth and expansion projects, but challenges persist due to trade tensions, increased CapEx, and an uncertain operating environment in Mexico.Q1-2025 Updates
Positive Updates
Sequential Increase in EBITDA
The company reported a sequential increase in EBITDA due to improved margins and slightly higher shipments.
Expansion Project in Mexico
The expansion project in Mexico is progressing with key facilities like the pickling and finishing lines already operational. The total CapEx for the project is revised to $4 billion, a 16% increase from previous estimates.
Strong Balance Sheet
Ternium maintains a strong balance sheet with a net cash position of $1.3 billion at the end of March 2025.
Positive Outlook for Argentina
The microeconomic situation in Argentina is showing signs of improvement, with expectations of increased shipments in the coming quarters.
Negative Updates
Challenging Operating Environment in Mexico
Uncertainty is affecting investment and consumption in Mexico, impacting steel demand. The administration's support for reducing reliance on Asian suppliers is seen as a positive step, but challenges remain.
CapEx Increase and Project Delays
The total CapEx for the Mexico expansion project increased by 16% due to higher assembly and construction prices, with a slight delay in project completion.
Ongoing Trade Tensions
Trade tensions and uncertainty pose risks to global economic growth, affecting business confidence.
Provision Adjustment Impact on Net Income
Net income for Q1 2025 was impacted by a $45 million provision adjustment related to ongoing litigation, with adjusted net income at $188 million.
Company Guidance
During Ternium's first quarter 2025 results call, the company projected a double-digit EBITDA margin for the second quarter, driven by cost reduction initiatives and higher realized steel prices in Mexico. The call highlighted a sequential increase in EBITDA in Q1, attributed to improved margins despite trade tensions affecting global economic growth. Ternium's expansion project in Mexico, with a revised total CapEx of $4 billion, was also discussed, noting a 16% increase from previous estimates due to higher assembly and construction costs. The company reported a net income of $142 million for the quarter, with adjusted net income at $188 million, reflecting an improvement over the prior quarter. Additionally, Ternium plans to sustain dividends despite ongoing trade uncertainties, supported by a strong balance sheet with a net cash position of $1.3 billion at the end of March 2025.Ternium SA Financial Statement Overview
Summary
Ternium SA is experiencing financial challenges with declining revenues and profitability impacting its income statement. The balance sheet remains strong with low leverage, but cash flow concerns persist due to negative free cash flow and high capital expenditures.Income Statement
Ternium SA shows a declining revenue trend over the TTM, with a significant drop in net income, resulting in negative net profit margins. The gross profit margin has also decreased, reflecting increased cost pressures. EBIT and EBITDA margins have deteriorated, indicating operational challenges. However, past years showed stronger profitability, hinting at potential recovery.55
Neutral
Balance Sheet
The balance sheet remains solid with a low debt-to-equity ratio, implying prudent financial leverage. The equity ratio is robust, underscoring strong asset backing. However, the recent decline in stockholders' equity due to net losses could pose future risks if not addressed.75
Positive
Cash Flow
Recent cash flow performance is concerning, with a negative free cash flow in the TTM reflecting high capital expenditures and declining operating cash flows. The operating cash flow to net income ratio is strong, but the trend of declining free cash flow indicates potential liquidity challenges if the situation persists.40
Negative
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 17.65B | 17.61B | 16.41B | 16.09B | 8.74B |
| Gross Profit | 2.88B | 5.26B | 3.93B | 6.20B | 1.64B |
| EBITDA | 1.88B | 2.21B | 3.33B | 5.96B | 1.77B |
| Net Income | -53.67M | 676.04M | 1.77B | 3.83B | 778.47M |
Balance Sheet | |||||
| Total Assets | 23.13B | 24.18B | 17.49B | 17.10B | 12.86B |
| Cash, Cash Equivalents and Short-Term Investments | 3.85B | 3.82B | 3.53B | 2.57B | 1.35B |
| Total Debt | 2.44B | 1.47B | 1.27B | 1.74B | 2.02B |
| Total Liabilities | 7.00B | 7.37B | 3.72B | 4.86B | 4.41B |
| Stockholders Equity | 11.97B | 12.42B | 11.85B | 10.54B | 7.29B |
Cash Flow | |||||
| Free Cash Flow | 40.74M | 1.04B | 2.17B | 2.15B | 1.20B |
| Operating Cash Flow | 1.91B | 2.50B | 2.75B | 2.68B | 1.76B |
| Investing Cash Flow | -1.38B | -1.47B | -1.32B | -1.05B | -1.18B |
| Financing Cash Flow | -488.38M | -766.36M | -1.02B | -854.38M | -506.25M |
Ternium SA Technical Analysis
Positive
30.88
Price Trends
29.43
Positive
28.65
Positive
29.32
Positive
Market Momentum
0.68
Positive
51.97
Neutral
37.45
Neutral
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 30.88 is below the 20-day moving average (MA) of 30.99, above the 50-day MA of 29.43, and above the 200-day MA of 29.32, indicating a neutral trend. The MACD of 0.68 indicates Positive momentum. The RSI at 51.97 is Neutral, neither overbought nor oversold. The STOCH value of 37.45 is Neutral, 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 (44)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $5.70B | 164.07 | 0.88% | 1.41% | -5.64% | -93.26% | |
73 Outperform | $5.84B | 10.33 | 5.86% | 2.89% | -9.33% | -51.03% | |
72 Outperform | $4.77B | 7.03 | 19.79% | ― | -15.93% | 86.43% | |
64 Neutral | $12.42B | 186.15 | 0.86% | 0.36% | -14.79% | -88.78% | |
61 Neutral | $6.16B | 73.52 | -2.75% | 11.52% | -10.20% | -152.18% | |
53 Neutral | $1.91B | ― | -16.28% | 12.42% | -9.84% | -14783.33% | |
44 Neutral | AU$1.42B | -5.95 | -40.74% | 3.87% | -3.45% | -41.76% |
* Basic Materials Sector Average
Performance Comparison
TX
Ternium SA
30.88
-2.45
-7.35%
CMC
Commercial Metals Company
51.24
-6.30
-10.95%
GGB
Gerdau SA
2.95
-0.40
-11.94%
SIM
Grupo Simec SA De CV
27.64
-2.46
-8.17%
SID
Companhia Siderúrgica Nacional
1.46
-0.82
-35.96%
X
United States Steel
54.84
16.89
44.51%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.