- Ternium (TX -4.7%) is downgraded to Neutral from Buy with a $21 price target, lowered from $23, at BofA/Merrill, which sees margins compressing going forward due to the rapid and perhaps structural decline in North American steel prices more than offsetting lower raw material prices.
- The firm expects the company's EBITDA to decline in Q2-Q3, although margins should recover afterwards, driven by a decrease in the mismatch between steel prices and cost.
- While Mexican demand for steel has been strong, driven by increased auto production, BofA says "Argentina's macro policies are highly unstable," with limited access to markets, a ballooning fiscal deficit, high inflation and an overvalued currency.