Ternium: Mexico Recovery Has Upside, But Cash Flow Still Matters

Ternium offers compelling upside, driven by robust Mexico steel demand and the transformative Pasqueria expansion targeting USMCA automotive clients. Q2 showcased strong operational momentum: Mexican shipments rose 5% QoQ, revenue per ton increased 6%, and adjusted EBITDA surged 50% to $717 million. Pasqueria's delayed start to early 2027 and ongoing high capex introduce execution and cash flow risks; Brazil and Argentina remain demand headwinds. My valuation model suggests 32% upside to $75.67/ADS for TX, contingent on Pasqueria's performance and resolution of a $599 million Usiminas litigation risk. Cavan Images/iStock via Getty Images Ternium ( TX ) looks quite interesting as a stock to me, as now it has a better Mexico steel market and at the same time is building a huge Pesquería expansion. I believe that this might be This article was written by CAN Analyst 1.41K Followers Follow I’m an independent equity trader and licensed financial advisor focused on uncovering high-upside opportunities in overlooked sectors especially focusing on small-caps, energy, commodities, and special situations. My investment strategy is based on growth. I look for fundamental momentum (EPS, ROE, revenue), price-volume confirmation, and macro filters. I also use econometric tools and calculations to analyse market direction, cycles and behaviour. I’ve been managing personal capital since 2020 and advising under MiFID II since qualifying with a license. I hold a bachelor’s in Business Administration and Economics and am currently completing a master’s in Finance. My masters thesis topic: Impact of Financial Results Announcements on Stock Returns and Trading Volumes of Micro-Capitalization Gold Mining Companies. Analyst’s 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. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.