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On Tuesday, Morgan Stanley (NYSE:MS) upgraded shares of Loma Negra Compania Industrial Argentina SA (NYSE:LOMA), shifting the stock rating from Equalweight to Overweight and maintaining the price target at $15.00. Currently trading at $12.68, the stock has delivered an impressive 70.66% return over the past year. The investment firm’s analysis suggests a favorable risk-reward scenario for the Argentine cement company, with an estimated bull/bear skew of approximately 1.5:1. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value estimates.
The upgrade reflects Morgan Stanley’s confidence in Loma Negra’s market position and operational prowess. With a market capitalization of $1.48 billion and a "GREAT" Financial Health Score from InvestingPro, the company demonstrates solid fundamentals. The firm anticipates a gradual recovery in demand which, combined with Loma Negra’s dominant share in the Argentine cement market, is expected to strengthen the company’s fundamentals. The investment in the L’Amali plant and the company’s consistent management execution have established Loma Negra as a cost leader, further contributing to the optimistic outlook.
Loma Negra has a track record of operational excellence, outperforming its peers since 2017. The company has consistently achieved higher EBITDA per ton figures, ranging between approximately $5 to $10 above the peer average. This performance, coupled with remarkable revenue growth of 83.83% over the last twelve months, underscores Loma Negra’s status as one of the top operators in the region.
The Argentine cement market, primarily domestic in nature, also presents a pricing advantage for Loma Negra. With current cement prices in Argentina around $115 per ton, they remain significantly below import parity levels. According to Morgan Stanley, this indicates that the prices have not reached their maximum potential, offering room for growth.
The revised price target of $15.00 represents Morgan Stanley’s increased confidence in the stock’s potential, backed by Loma Negra’s strong market position and cost leadership. The firm’s analysis concludes that the company is well-positioned to capitalize on the recovering demand and maintain its operational superiority in the cement industry.
In other recent news, Loma Negra has reported its financial results for the first quarter of 2025, fulfilling its reporting obligations to the U.S. Securities and Exchange Commission. While the specific earnings and revenue figures were not disclosed, the filing underscores the company’s commitment to transparency and compliance. Additionally, Loma Negra has filed its annual report on Form 20-F for the fiscal year ending December 31, 2024. This report provides a detailed overview of the company’s financial performance and strategic direction, offering investors crucial insights into its operations and financial health.
In a separate development, BofA Securities has upgraded Loma Negra’s stock rating from Neutral to Buy. The firm also raised its price target to $14.00, citing positive macroeconomic changes and an anticipated economic recovery in Argentina. BofA Securities projects a significant increase in cement volume growth for Loma Negra, with expectations of a 10% rise in 2025. The firm also highlighted investment opportunities in Argentina’s commodities sector as a factor in its optimistic outlook. These recent developments reflect Loma Negra’s potential for growth in an evolving economic environment.
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