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Investing.com - Morgan Stanley (NYSE:MS) upgraded Grupo Mexico SAB de CV (BMV:GMEXICOB) (OTC:GMEX) from Equalweight to Overweight on Tuesday, raising its price target to 140.00 pesos from 105.00 pesos.
The upgrade reflects Morgan Stanley’s view that the stock’s trading discount to its sum-of-parts valuation will continue to decrease from its recent peak. The firm cited the announced delisting of Grupo Mexico’s railway subsidiary as a factor making it unlikely the company will pursue large investments outside its core business in the near future.
Morgan Stanley also pointed to reduced regulatory uncertainty in Mexico as a potential benefit for Grupo Mexico shares. The firm described Grupo Mexico as "the cheapest way to play copper" within its coverage universe.
The stock currently trades at 10.6x and 5.0x on Morgan Stanley’s 2026 EBITDA and EPS estimates, respectively. These multiples are slightly below Grupo Mexico’s 5-year average EV/EBITDA multiple of 10.8x and P/E multiple of 5.3x.
Grupo Mexico is a major mining corporation with significant copper production operations, along with transportation and infrastructure divisions.
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