High Costs And Macro Worries Drag Cemex Down

Dec. 12, 2022 9:21 PM ETCEMEX, S.A.B. de C.V. (CX)EXP, MLM
Stephen Simpson profile picture
Stephen Simpson


  • Cemex has underperformed, with investors fretting about both a weaker demand environment in 2023 and underwhelming profitability at this global cement giant.
  • Management continues to talk a lot about environmental/sustainability and growth initiatives, but I want to hear what they intend to do about underwhelming cost/profitability that increasingly seems structural and long-standing.
  • Next year is likely to see U.S. volumes contract on weaker housing and non-residential, but the long-term combination of housing, non-residential, and infrastructure demand and limited new supply is bullish.
  • Underwhelming profitability remains a key risk, but even with more conservative assumptions, Cemex shares appear undervalued.

Filling a bucket with cement at construstion site


My bullish call on Cemex (NYSE:CX) in February was predicated on strong volumes and pricing in the U.S. driving better profits and cash flow, with a healthy outlook for increasing infrastructure spending supporting the longer-term view. While U.S. demand

This article was written by

Stephen Simpson profile picture
Stephen Simpson is a freelance financial writer and investor. Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds); now a semi-retired raccoon rancher. That last part isn't entirely true. Probably.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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