Lowering Best-Idea Cemex’s Fair Value on a Weaker Mexican Peso, but Growth Outlook Remains Intact
Since adding Cemex to the Best Ideas list in December, share prices have been relatively flat. Over the same time period, the Mexican peso has depreciated 6.5%, to roughly 21.9 Mexican pesos to 1 U.S. dollar. Given the company’s large Mexican footprint, the weaker peso has an adverse impact on our fair value estimate. Separately, we’ve lowered our cost of debt assumption to 8% from 10%, reflecting our view that Cemex’s credit risk has decreased as financial performance improves and leverage fall...
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