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Currently, CEMEX S.A. de C.V. (CX) is the third-largest cement company in the world, the fourth largest aggregates producer, and the largest ready-mix producer. The company is diversified by nation and region, and has a good growth record. It is a dominant force in Mexico, Spain, the U.K. and the U.S.
We are keeping our Sell rating on CEMEX. The company posted weak results in the third quarter of 2008, together with a 74% year-over-year decline in net income. The continued weak cement volumes in Spain and the U.S. are problematic.
The short-term outlook for the company remains highly uncertain based on the downtrend in the residential, industrial/commercial sector, and the infrastructure sector as well due to the fall in the real estate prices throughout the world.
However, the expected infrastructure plan to be announced by U.S. President-elect Barack Obama would definitely boost cement demand in the world. Nevertheless, the current credit crunch and the recession in U.S. are matters of huge concern.
Read the full analyst report on CX
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