Goldman Sachs Raises CEMEX Buy Rating to $11, PT Raised from $10

Goldman Sachs Raises CEMEX Buy Rating to $11, PT Raised from $10

Goldman Sachs has upgraded its rating for CEMEX (NYSE:CX) to "Buy" and raised its price target to $11, up from the previous $10. The upgrade comes amidst a strong year-to-date performance for CEMEX, with the stock gaining 70.86% and trading near its 52-week high of $9.62. The new rating reflects Goldman Sachs' positive outlook on CEMEX's cost-saving initiatives and expected earnings improvement.

The upgrade is supported by several key factors. Goldman Sachs highlights CEMEX's successful cost-saving efforts, which have led to a significant reduction in expenses. The firm expects a meaningful cost reduction of $400 million from the end of 2025 to the end of 2027, along with a projected increase in cash conversion from 18% in 2025 to 39% in 2028. Additionally, Goldman Sachs anticipates material improvement in cement volume growth in Mexico, shifting from -7.5% in 2025 to +2% in 2026, and in the US from -3% this year to +3%.

Goldman Sachs also notes the potential benefits from dollar weakness, with 70% of CEMEX’s debt in USD while only 30% of its EBITDA is generated in the US. The firm expects an EBITDA margin expansion of 130 basis points from the end of 2025 to the end of 2027. These factors contribute to Goldman Sachs' bullish outlook on CEMEX's stock performance.

In other recent news, CEMEX has announced a second dividend installment for holders of its Ordinary Participation Certificates (CPOs) and American Depositary Shares (ADSs), amounting to $32.5 million, part of a total $130 million cash dividend approved earlier this year. Additionally, S&P Global Ratings upgraded CEMEX's long-term national credit rating to 'mxAAA' from 'mxAA+', citing an updated methodology for rating companies on the Mexican national scale.

Goldman Sachs' upgrade follows similar positive assessments from other major financial institutions. BofA Securities upgraded CEMEX from Neutral to Buy, raising its price target to $10.80. Scotiabank also increased its price target for CEMEX to $10.90, reflecting updated assumptions about U.S. Treasury yields.

These developments provide a comprehensive view of CEMEX's current financial and market standing. Investors should closely monitor CEMEX's third-quarter earnings and any further updates from the company or its analysts.