On Wednesday, JPMorgan (NYSE:JPM) reaffirmed its Overweight rating on shares of CEMEX (NYSE:CX). Following CEMEX's 2024 Investor Day, the firm focused on the cement company's mid-term goals and strategic plans, highlighting several key points.
The company aims to achieve a high single-digit compound annual growth rate (CAGR) in EBITDA by 2027. This growth is expected to be supported by a continued emphasis on the United States, Europe, and Mexico markets, which currently represent 84% of CEMEX's EBITDA.
CEMEX outlined its capital allocation priorities, which remain consistent with previous strategies. Still, the company now has increased flexibility to prioritize growth investments over shareholder returns and debt repayment. An investment pipeline of $1.9 billion is currently underway, which is anticipated to contribute $638 million to the company's stabilized EBITDA.
The company also reported an improvement in demand this year, with strong pricing strategies set to continue. The mid-term outlook for their key regions is optimistic. Moreover, CEMEX is advancing its sustainability strategy, focusing on reducing emissions before capturing them. This approach aligns with the company's significant progress toward its sustainability targets for 2030.
CEMEX's strategic direction also includes a larger contribution from urbanization solutions, illustrating the company's adaptation to market demands and opportunities. The firm's optimism about CEMEX's performance in the mid-term is based on these comprehensive strategic initiatives and the company's execution of its investment pipeline.
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