Scotiabank raises Cemex stock price target to $10.90 on lower rates

Investing.com - Scotiabank raised its price target on CEMEX (NYSE:CX) to $10.90 from $8.10 on Tuesday, representing a 35% increase, while maintaining a Sector Outperform rating on the cement maker’s stock. The new target comes as CEMEX trades near its 52-week high of $9.19, having delivered impressive returns of over 62% year-to-date.

The price target adjustment reflects Scotiabank’s revised assumptions for the U.S. 10-Year Treasury yield, which the bank’s economists now expect to reach 4.25% rather than the previously forecasted 4.75%. According to InvestingPro data, CEMEX maintains a healthy financial profile with a "GOOD" overall score, suggesting resilience to interest rate fluctuations.

This interest rate outlook change led Scotiabank to reduce its cost of equity calculation for CEMEX from 15.0% to 12.88%, while the weighted average cost of capital (WACC) decreased from 10.7% to 9.31%.

Scotiabank also made minor adjustments to its EBITDA forecasts for the company, incorporating more conservative volume projections for Mexico due to intense summer rainfall in the region.

The bank noted that a stronger Mexican peso compared to its April 2025 forecast was another factor in its updated financial model for the cement and building materials company.

In other recent news, Cemex has announced several significant developments that may interest investors. The company has successfully closed a $1 billion subordinated notes offering, which was sold to qualified institutional buyers and non-U.S. persons. Additionally, Cemex will distribute a cash dividend totaling $130 million, with the first installment scheduled for June 18, 2025. This dividend will be paid in four equal installments, benefiting holders of Cemex Ordinary Participation Certificates and American Depositary Shares.

In terms of stock evaluations, JPMorgan has upgraded Cemex’s stock rating from Neutral to Overweight, citing a cost-saving program and raising the price target to $10.50. Meanwhile, BofA Securities has increased its price target for Cemex to $8.00, maintaining a Neutral rating, due to a lower cost of capital in its valuation model. These analyst actions reflect differing perspectives on Cemex’s financial strategies and market positioning.

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