Cemex falls after Santander cuts ADR price estimate

Cemex falls after Santander cuts ADR price estimate
Published: 19 February 2009

Cemex declined for a second day after Banco Santander SA cut its share-price estimate for the company’s American depositary receipts.

Cemex dropped three per cent to 10.19 pesos in Mexico City trading, leaving it down 13 per cent in the past two days.

Mexico City-based analyst Gonzalo Fernandez reduced his yearend estimate for Cemex ADRs to US$8 from $9 amid slowing economic growth and currency fluctuations, according to a research note today. He has a “hold” rating on the stock. He lowered his estimate for Cemex’s 2009 earnings before interest, taxes, depreciation and amortization, or Ebitda, to $3.5bn from $4.6bn.

Mexico’s economy may contract as much as 1.8 per cent this year, the central bank said on Jan. 27. The Mexican peso has declined 30 per cent against the dollar in the past six months, the worst performance of the major currencies tracked by Bloomberg.

Cemex forecasts a five per cent drop in Mexican cement demand on lower non-residential construction. It projects a double-digit percentage declines in Spain, the US and the UK.