Mexican stock market downgraded by Barclays as tariff risks persist

Published 15/07/2025, 10:22
© Reuters.

Investing.com - Barclays (LON:BARC) has downgraded its outlook on Mexican equities, citing persistent tariff uncertainties and limited upside potential despite the market’s strong year-to-date performance.

Mexican stocks have outperformed major indices with the Mexbol IPC gaining 23.5% year-to-date in USD terms compared to the S&P 500’s 6.5% increase, according to Barclays’ analysis. This outperformance has occurred despite what the investment bank describes as a "lackluster Mexican economy."

The investment bank notes that companies in its Mexican coverage are trading at approximately 7x EV/EBITDA, slightly below their 10-year average, with an average upside potential of only 19%. Barclays believes these valuations are starting to fully reflect the earnings potential of these companies.

Tariff concerns remain a key issue for Mexican equities, with President Trump’s threat of 30% tariffs creating ongoing uncertainty. While the Mexican stock market has shown resilience to these threats, Barclays warns that "a prolonged wait-and-see approach could erode Mexico’s medium-term EPS growth potential."

For the second quarter of 2025, Barclays projects companies in its coverage will see average revenue growth of 9%, EBITDA growth of 7.5%, and EPS growth of 9%, with the covered stocks trading at 6.9x EV/2025 EBITDA and 12.8x P/E while offering an estimated dividend yield of 3.9%.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.