It’s time to buy Cemex , according to Goldman Sachs. Analyst Bruno Amorim upgraded Cemex to buy after the company’s strong first-quarter results, citing strong pricing power amid easing inflation for the concrete and building materials company. “[We] upgrade Cemex to Buy reflecting a better than expected pricing environment as evidenced by 1Q23 results,” Amorim wrote in a Wednesday note. “Prices increased significantly in early 2023 despite lower volumes (the main risk we anticipated for the CX story), highlighting the industry and particularly CX are primarily focused on regaining profitability and not necessarily volume growth (management even mentioned in the earnings call they lost market share in some segments to maintain pricing strong),” Amorim added. CX YTD mountain Cemex shares YTD The U.S.-listed shares of Cemex are surging this year, higher by 55%. In 2022, they tumbled 40%. Shares gained more than 1% on the upgrade. Meanwhile, the analyst’s 12-month price target of $9 implies shares could jump 43% from Wednesday’s close. Cemex this week reported first-quarter results that topped analysts’ expectations. It posted operating EBITDA of $733 million, more than the $644 million consensus from FactSet. It reported revenue of $4.04 billion compared to a forecast of $3.93 billion. The analyst added that, “while we acknowledge the risk of a further global macro slow down, we now base case CX delivering EBITDA growth of 18% in 2023E (11% above Bloomberg consensus), reaching 18.5% EBITDA margin (still ~1p.p. below management’s target for the medium term of going back to 2021 levels of 19.7%),” Amorim wrote. —CNBC’s Michael Bloom contributed to this report.
