Cemex Analyst Says Discipline Is Paying Off, As Q1 Results Surpass Predictions

Shares of Cemex SAB de CV CX were rising on Thursday, after the company reported growth in its first-quarter sales and earnings.

The company’s first-quarter results are indicative of a better-than-expected pricing environment, according to Goldman Sachs.

The Cemex Analyst: Bruno Amorim upgraded the rating on Cemex to a Buy, while raising the price target to $9.

The Cemex Thesis: The company reported operating EBITDA of $733 million for the first quarter, beating consensus expectations, driven mainly by “stronger-than-expected pricing traction,” Amorim said in the upgrade note.

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“We note such price increases came in the context of easing inflationary pressures on costs, which in our view highlights that the company and the industry are likely to continue focusing on improving EBITDA margins and not necessarily sustaining volumes in a tough macro environment,” the analyst wrote.

While there is the risk of a further slowdown in the global macro environment, Cemex could generate at least 18% EBITDA growth in 2023, with EBITDA margins of 18.5%, he added.

CX Price Action: Shares of Cemex were up 2.22% to $6.45 at the time of publishing Thursday.

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