At Mex$13.01, Is It Time To Put CEMEX, S.A.B. de C.V. (BMV:CEMEXCPO) On Your Watch List?

By
Simply Wall St
Published
November 18, 2021
BMV:CEMEX CPO
Source: Shutterstock

CEMEX, S.A.B. de C.V. (BMV:CEMEXCPO), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the BMV over the last few months, increasing to Mex$16.71 at one point, and dropping to the lows of Mex$12.71. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether CEMEX. de's current trading price of Mex$13.01 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CEMEX. de’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for CEMEX. de

What's the opportunity in CEMEX. de?

The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that CEMEX. de’s ratio of 14.5x is trading slightly above its industry peers’ ratio of 14.07x, which means if you buy CEMEX. de today, you’d be paying a relatively reasonable price for it. And if you believe that CEMEX. de should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Is there another opportunity to buy low in the future? Since CEMEX. de’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from CEMEX. de?

earnings-and-revenue-growth
BMV:CEMEX CPO Earnings and Revenue Growth November 19th 2021

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. CEMEX. de's earnings over the next few years are expected to increase by 94%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? CEMEX CPO’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at CEMEX CPO? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on CEMEX CPO, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for CEMEX CPO, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into CEMEX. de, you'd also look into what risks it is currently facing. While conducting our analysis, we found that CEMEX. de has 3 warning signs and it would be unwise to ignore these.

If you are no longer interested in CEMEX. de, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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