Yet Another Ternium Convert

Nov. 5.09 | About: Ternium S.A. (TX)

Last week Morgan Stanley got religion on Ternium (NYSE:TX), upgrading TX to "overweight" from "equal weight". Does that mean neutral?

How can you be neutral on Ternium?

Analyst Carlos De Alba finally asked himself that question.

His conclusion is most telling:

The Sidor sale will increase Ternium's cash balance to $2.8 billion by the end of 2010... Therefore, we expect Ternium to have the strongest balance sheet in our steel coverage universe.

We've been saying that for months on this lonely little site. In fact, I'll go so far as to say that one must be ignorant of Ternium and its fundamentals to invest in any other steel company.

Morgan doesn't go that far. But they're already playing catch-up:

  • Morgan Stanley's old price target: $22 a share.
  • Morgan Stanley's new price target: $33 a share.

What a laugh. It's almost like Mr. De Alba looked at Ternium for the very first time!

Note to self: Find resume.

Disclosure: Author owns shares of Ternium