Carlos Peyrelongue, an analyst from Bank of America Securities, reiterated the Buy rating on Cemex SAB (CX – Research Report). The associated price target is $9.00.
Carlos Peyrelongue has given his Buy rating due to a combination of factors that suggest a positive outlook for Cemex SAB. Despite a mixed performance in the fourth quarter with revenues and EBITDA falling short of some expectations, the company demonstrated a significant year-over-year growth, with an 18% increase in EBITDA and a healthy EBITDA margin that met its target. Moreover, the company has managed to control energy costs, contributing to an improved margin performance. Peyrelongue also notes the company’s capacity to recover from the impact of a Spanish tax provision, which affected its bottom line.
Looking ahead, Peyrelongue’s optimism is further underpinned by several key drivers. He anticipates that Cemex will benefit from the nearshoring trend and a stable economic environment in the US and Mexico, which is expected to support cement volume growth. Additionally, the alignment of cement prices with inflation and the anticipated decrease in input costs, including key commodities such as petcoke, coal, natural gas, and diesel, are seen as positive indicators. The potential boost from President Biden’s infrastructure package and increased fiscal spending in Mexico, ahead of the presidential elections, also play a crucial role in reinforcing the Buy rating.
CX’s price has also changed slightly for the past six months – from $7.920 to $7.980, which is a 0.76% increase.
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Cemex SAB (CX) Company Description:
CEMEX SAB de CV engages in the production, distribution, marketing, and sale of cement, ready-mix concrete, and aggregates. It operates though the following geographical segments: Mexico; United States; Europe; South, Central America and the Caribbean (SCA&C); Asia, Middle East and Africa (AMEA); and Others. The Europe segment covers United Kingdom, Germany, France, Spain, and Czech Republic, Poland and Latvia, as well as trading activities in Scandinavia, and Finland. The SCA&C segment includes Colombia, Panama, Costa Rica, Caribbean TCL, the Dominican Republic, Puerto Rico, Nicaragua, Jamaica, the Caribbean, El Salvador, and Guatemala. The EMEA segment comprises of Egypt, Israel, the Philippines, and the United Arab Emirates. The Others segment refers to the cement trade maritime operations, information technology solutions business, and other corporate entities as well as other minor subsidiaries with different lines of business. The company was founded by Lorenzo Zambrano Gutierrez in 1906 and is headquartered in San Pedro Garza Garcia, Mexico.
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