NYSE:TX

Stock Analysis Report

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Executive Summary

Ternium S.A., through its subsidiaries, manufactures and processes various steel products in Mexico, Argentina, Paraguay, Chile, Bolivia, Uruguay, Brazil, the United States, Colombia, Guatemala, Costa Rica, Honduras, El Salvador, and Nicaragua.


Snowflake Analysis

Flawless balance sheet, undervalued and pays a dividend.


Similar Companies

Share Price & News

How has Ternium's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TX has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

14.9%

TX

3.1%

US Metals and Mining

1.9%

US Market


1 Year Return

-18.4%

TX

26.4%

US Metals and Mining

16.4%

US Market

Return vs Industry: TX underperformed the US Metals and Mining industry which returned 25.2% over the past year.

Return vs Market: TX underperformed the US Market which returned 16.3% over the past year.


Shareholder returns

TXIndustryMarket
7 Day14.9%3.1%1.9%
30 Day11.4%12.1%4.5%
90 Day20.5%25.7%17.6%
1 Year-10.9%-18.4%29.2%26.4%18.9%16.4%
3 Year-34.3%-44.2%19.4%11.7%44.1%34.8%
5 Year38.2%7.2%89.3%72.5%75.3%56.3%

Price Volatility Vs. Market

How volatile is Ternium's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Ternium undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TX ($16.56) is trading below our estimate of fair value ($74.13)

Significantly Below Fair Value: TX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TX is poor value based on its PE Ratio (16.4x) compared to the US Metals and Mining industry average (14.7x).

PE vs Market: TX is good value based on its PE Ratio (16.4x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: TX is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: TX is good value based on its PB Ratio (0.5x) compared to the US Metals and Mining industry average (1.9x).


Next Steps

Future Growth

How is Ternium forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

36.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TX's forecast earnings growth (36.7% per year) is above the savings rate (2.2%).

Earnings vs Market: TX's earnings (36.7% per year) are forecast to grow faster than the US market (23.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TX's revenue (7.8% per year) is forecast to grow slower than the US market (9.4% per year).

High Growth Revenue: TX's revenue (7.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TX's Return on Equity is forecast to be low in 3 years time (7.7%).


Next Steps

Past Performance

How has Ternium performed over the past 5 years?

26.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TX has a large one-off gain of $120.2M impacting its June 30 2020 financial results.

Growing Profit Margin: TX's current net profit margins (2.3%) are lower than last year (11.6%).


Past Earnings Growth Analysis

Earnings Trend: TX has become profitable over the past 5 years, growing earnings by 26.4% per year.

Accelerating Growth: TX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TX had negative earnings growth (-84.4%) over the past year, making it difficult to compare to the Metals and Mining industry average (-22.6%).


Return on Equity

High ROE: TX's Return on Equity (3%) is considered low.


Next Steps

Financial Health

How is Ternium's financial position?


Financial Position Analysis

Short Term Liabilities: TX's short term assets ($3.9B) exceed its short term liabilities ($1.6B).

Long Term Liabilities: TX's short term assets ($3.9B) exceed its long term liabilities ($3.2B).


Debt to Equity History and Analysis

Debt Level: TX's debt to equity ratio (27.3%) is considered satisfactory.

Reducing Debt: TX's debt to equity ratio has reduced from 36% to 27.3% over the past 5 years.

Debt Coverage: TX's debt is well covered by operating cash flow (88.6%).

Interest Coverage: TX's interest payments on its debt are well covered by EBIT (11.5x coverage).


Balance Sheet


Next Steps

Dividend

What is Ternium current dividend yield, its reliability and sustainability?

7.25%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TX's dividend (7.25%) is higher than the bottom 25% of dividend payers in the US market (1.62%).

High Dividend: TX's dividend (7.25%) is in the top 25% of dividend payers in the US market (4.35%)


Stability and Growth of Payments

Stable Dividend: TX's dividends per share have been stable in the past 10 years.

Growing Dividend: TX's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (118.8%), TX's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TX's dividends in 3 years are forecast to be well covered by earnings (40.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.0yrs

Average management tenure


CEO

Máximo Vedoya (49 yo)

2.42yrs

Tenure

Mr. Máximo Vedoya serves as Chief Executive Officer of Ternium S.A. since March 1, 2018. Mr. Vedoya is an Industrial Engineer and holds a Master in Science of Management degree from Stanford University. Wi ...


Leadership Team

NamePositionTenureCompensationOwnership
Máximo Vedoya
Chief Executive Officer2.42yrsno datano data
Pablo Daniel Brizzio
Chief Financial Officer10.58yrsno datano data
Roberto Demidchuk
Chief Information Officerno datano datano data
Sebastián Martí
Investor Relations Director15.08yrsno datano data
Rodrigo Piña
Human Resources Director7.58yrsno datano data
Martin Berardi
Ternium Argentina President2.42yrsno datano data
Héctor Zunzunegui
International Business Unit President7.83yrsno datano data
Arturo Sporleder
Secretaryno datano datano data
César Alejandro Jiménez
Ternium Mexico President2.42yrsno datano data
Marcelo Chara
Ternium Brasil President2.42yrsno datano data

5.0yrs

Average Tenure

54.5yo

Average Age

Experienced Management: TX's management team is seasoned and experienced (5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paolo Rocca
Chairman15.58yrsno datano data
Roberto Bonatti
Director15.58yrsno datano data
Carlos Alberto Condorelli
Director15.58yrsno datano data
Adrian Lajous Vargas
Independent Director14.58yrsno datano data
Gianfelice Mario Rocca
Director14.58yrsno datano data
Daniel Novegil
Vice Chairman2.42yrsno datano data
Ubaldo José Aguirre
Independent Director14.58yrsno datano data
Vincent Gilles Decalf
Independent Director4.92yrsno datano data
Gioia Ghezzi
Director0.17yrno datano data

14.6yrs

Average Tenure

69yo

Average Age

Experienced Board: TX's board of directors are seasoned and experienced ( 14.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Ternium S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ternium S.A.
  • Ticker: TX
  • Exchange: NYSE
  • Founded: 1961
  • Industry: Steel
  • Sector: Materials
  • Market Cap: US$3.251b
  • Shares outstanding: 196.31m
  • Website: https://www.ternium.com

Number of Employees


Location

  • Ternium S.A.
  • 26, Boulevard Royal
  • 4rd Floor
  • Luxembourg
  • 2449
  • Luxembourg

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TXNYSE (New York Stock Exchange)YesADR EACH REPR 10 ORD NPVUSUSDFeb 2006
T5ZDB (Deutsche Boerse AG)YesADR EACH REPR 10 ORD NPVDEEURFeb 2006
TX *BMV (Bolsa Mexicana de Valores)YesADR EACH REPR 10 ORD NPVMXMXNFeb 2006

Biography

Ternium S.A., through its subsidiaries, manufactures and processes various steel products in Mexico, Argentina, Paraguay, Chile, Bolivia, Uruguay, Brazil, the United States, Colombia, Guatemala, Costa Rica ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/08/09 23:55
End of Day Share Price2020/08/07 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.