Ternium SA (TX) AI Stock Analysis

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Ternium SA

(NYSE:TX)

Rating:58Neutral

Price Target:

$30.00

▼(-0.43%Downside)

The overall stock score is primarily influenced by financial performance challenges, with declining revenues and liquidity concerns being significant. Technical analysis provides a modestly positive outlook, while the earnings call offers a mixed sentiment with both positive initiatives and notable risks. Valuation remains a concern due to negative earnings, slightly offset by a high dividend yield.

Ternium SA (TX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$5.91B

Dividend Yield11.95%

Average Volume (3M)163.23K

Price to Earnings (P/E)73.5

Beta (1Y)0.51

Revenue Growth-10.20%

EPS Growth-152.18%

CountryUS

Employees33,949

SectorBasic Materials

Sector Strength67

IndustrySteel

Share Statistics

EPS (TTM)0.55

Shares Outstanding196,307,680

10 Day Avg. Volume187,740

30 Day Avg. Volume163,232

Financial Highlights & Ratios

PEG Ratio-0.12

Price to Book (P/B)0.65

Price to Sales (P/S)0.00

P/FCF Ratio7.25

Enterprise Value/Market Cap7.64

Enterprise Value/Revenue0.63

Enterprise Value/Gross Profit19.75

Enterprise Value/Ebitda7.96

Forecast

1Y Price Target

$37.67

Price Target Upside25.02% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

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 SA makes money through the production and sale of steel and steel-related products. Its revenue model is primarily driven by the sale of flat and long steel products, which are used in various industries including construction, automotive, and manufacturing. Key revenue streams include the direct sale of these products to industrial clients and through distribution channels across Latin America and other regions. The company benefits from strategic partnerships and joint ventures which enhance its production capabilities and market reach. Additionally, Ternium's vertical integration allows it to control costs and maintain competitive pricing in the market.

Ternium SA Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: 8.69%|

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 faces financial challenges with declining revenues and profitability affecting its income statement. Despite a strong balance sheet with manageable leverage, the cash flow statement highlights potential liquidity concerns. Strategic improvements are necessary to regain financial stability.

Income Statement

Neutral

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.

Balance Sheet

Positive

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.

Cash Flow

Negative

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
16.71B	17.65B	17.61B	16.41B	16.09B	8.74B
	Gross Profit
2.29B	2.88B	5.26B	3.93B	6.20B	1.64B
	EBIT
657.80M	1.26B	2.20B	2.70B	5.27B	1.08B
	EBITDA
1.26B	1.88B	2.21B	3.33B	5.96B	1.77B
	Net Income Common Stockholders
-341.77M	-53.67M	676.04M	1.77B	3.83B	778.47M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.75B	3.85B	3.82B	3.53B	2.57B	1.35B
	Total Assets
23.72B	23.13B	24.18B	17.49B	17.10B	12.86B
	Total Debt
2.69B	2.44B	1.47B	1.27B	1.74B	2.02B
	Net Debt
857.00M	748.98M	-371.37M	-382.31M	462.11M	1.48B
	Total Liabilities
7.18B	7.00B	7.37B	3.72B	4.86B	4.41B
	Stockholders Equity
12.11B	11.97B	12.42B	11.85B	10.54B	7.29B
Cash Flow		Free Cash Flow
-299.70M	40.74M	1.04B	2.17B	2.15B	1.20B
	Operating Cash Flow
1.59B	1.91B	2.50B	2.75B	2.68B	1.76B
	Investing Cash Flow
-1.20B	-1.38B	-1.47B	-1.32B	-1.05B	-1.18B
	Financing Cash Flow
-254.61M	-488.38M	-766.36M	-1.02B	-854.38M	-506.25M

Ternium SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price30.13

Price Trends

50DMA

27.62

Positive

100DMA

28.13

Positive

200DMA

29.28

Positive

Market Momentum

MACD

0.56

Negative

RSI

64.87

Neutral

STOCH

76.13

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 30.13 is above the 20-day moving average (MA) of 28.75, above the 50-day MA of 27.62, and above the 200-day MA of 29.28, indicating a bullish trend. The MACD of 0.56 indicates Negative momentum. The RSI at 64.87 is Neutral, neither overbought nor oversold. The STOCH value of 76.13 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 (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIM	74 Outperform	$4.55B	7.24	19.79%	―	-15.93%	86.43%
GGB	73 Outperform	$5.93B	10.75	5.86%	2.87%	-9.33%	-51.03%
CMC	72 Outperform	$5.54B	81.45	1.78%	1.47%	-7.93%	-89.29%
X	64 Neutral	$12.42B	186.15	0.86%	0.36%	-14.79%	-88.78%
TX	58 Neutral	$5.91B	73.52	-2.75%	11.95%	-10.20%	-152.18%
Sector *	51 Neutral	$2.01B	-1.26	-21.11%	4.38%	2.92%	-30.46%
SID	49 Neutral	$1.97B	―	-16.28%	12.17%	-9.84%	-14783.33%

* Basic Materials Sector Average

Performance Comparison

Ternium SA

30.13

-3.46

-10.30%

CMC

Commercial Metals Company

49.04

-2.90

-5.58%

GGB

Gerdau SA

2.95

-0.11

-3.59%

SIM

Grupo Simec SA De CV

28.48

-3.01

-9.56%

SID

Companhia Siderúrgica Nacional

1.49

-0.78

-34.36%

United States Steel

54.84

18.00

48.86%

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.