Ternium SA (TX) AI Stock Analysis

Ternium SA

(BMV:TX)

Rating:―N/A

Action:N/A

Date:―

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Positive Factors

Profitability recoveryThe substantial year-over-year improvement in EBITDA and margins shows that Ternium is recovering operating earnings through stronger volumes, pricing, and execution. If maintained, this rebound can rebuild earnings power and support reinvestment across its steel and mining operations.

Negative Factors

Weak free cash flowNegative free cash flow despite improved profitability limits the cash available for debt reduction, dividends, and growth investment. Moderate conversion from earnings also means that working-capital movements or elevated capital spending could continue to constrain financial flexibility.

Ternium SA (TX) vs. SPDR S&P 500 ETF (SPY)

Market Cap: MXN 10.36B
Dividend Yield: 3.83%
Average Volume (3M): 1,750
Price to Earnings (P/E): 14.6
Beta (1Y): 0.21
Revenue Growth: -10.21%
EPS Growth: 4.37%
Country: Mexico
Employees: 33,253
Sector: Basic Materials
Sector Strength: 61
Industry: Steel

Ternium SA Business Overview & Revenue Model

Company Description

Ternium S.A. is an international steel enterprise engaged in the production, processing, and sale of a wide range of steel products. Its extensive market presence covers Mexico, Argentina, Brazil, the United States, and numerous other countries acros...

Ternium SA Earnings Call Summary

Earnings Call Date:Aug 03, 2026(Q2-2026)|% Change Since:17.05%|Next Earnings Date:Nov 02, 2026

Earnings Call SentimentPositive

The call conveyed a predominantly positive operational and financial trajectory: strong sequential EBITDA growth, significant year‑over‑year improvement in first-half results, shipment recovery in Mexico, progress on strategic projects (Pesqueria) and customer recognitions. Offsetting points include a sizeable working capital build that turned net cash into net debt, foreign exchange and tax-related financial headwinds, ongoing trade uncertainty (Section 232) and the fact that Pesqueria's full benefits will be realized only after a multi‑quarter ramp-up. On balance, the positive improvements in profitability, clear path to lower CapEx and management's commitment to shareholder returns outweigh short-term cash and trade challenges.

Positive Updates

Strong Sequential EBITDA Recovery

Adjusted EBITDA rose 50% sequentially in Q2 2026, with adjusted EBITDA margin expanding to 16.5% from 12.2% in Q1; steel cash operating income increased by $204 million sequentially.

Negative Updates

Working Capital Build and Weaker Operating Cash Flow

Q2 experienced a $418 million buildup in working capital (reflecting higher sales and raw material costs); cash from operations for H1 totaled $473 million and declined year-over-year mainly due to higher inventory values and receivables.

Company Guidance

Ternium guided to continued sequential improvement into Q3, expecting adjusted EBITDA to rise further after Q2’s strong quarter (adjusted EBITDA up 50% sequentially; adjusted EBITDA margin 16.5% vs 12.2% in Q1), supported by higher shipments (consolidated shipments +4% q/q) and better realized prices (steel cash operating income +$204m q/q); Q2 net income was $465m and H1 net income $837m with H1 adjusted EBITDA $1.2bn (+65% y/y) and H1 EBITDA margin 14% (vs 9% LY), EPS $2.84/ADS. Management expects volumes to keep recovering mainly in Mexico and Brazil, CapEx to decline from $1.6bn for full-year 2026 to ~ $1.2bn in 2027 (H1 CapEx $837m), Pesqueria slab start-up in early 2027 (ramp/certification for >2.5Mt), and a strong balance sheet (net debt $112m at June vs net cash $327m at March) despite a $418m working‑capital build and a $255m dividend paid.

Ternium SA Risk Analysis

Ternium SA disclosed 47 risk factors in its most recent earnings report. Ternium SA reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

2 New Risks

1.Ternium's strategic growth projects could be delayed, the cost of those projects could increase, or Ternium's competitiveness could be affected, if the operations of certain suppliers of heavy equipment are disrupted by geopolitical risk, adversely affecting Ternium's growth opportunities and profitability.Q4, 2023

2.Certain Regulatory Risks And Litigation Risks Ternium faces a significant loss contingency in Brazil in connection with its acquisition of a participation in the control group of Usiminas.Q4, 2023

Ternium SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

MX:TX against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GGB	63Neutral	$8.53B	15.56	5.06%	3.23%	10.25%	4.20%
Sector *	61Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
CLF	54Neutral	$8.13B	-16.01	-8.14%	―	8.10%	75.20%
MT	53Neutral	$44.53B	25.14	3.31%	1.21%	3.25%	-27.63%
SIM	53Neutral	$4.24B	11.57	9.07%	―	16.64%	51.26%
SID	43Neutral	$941.07M	-2.14	-18.55%	―	9.29%	-26.44%

* Basic Materials Sector Average

Performance Comparison

MX:TX and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
MX:TX	Ternium	1017.20	373.68	58.07%
MT	ArcelorMittal	59.81	22.08	58.51%
CLF	Cleveland-Cliffs	14.25	2.38	20.05%
GGB	Gerdau	4.66	1.29	38.36%
SIM	Grupo Simec S.a. De C.v.	25.65	-2.60	-9.20%
SID	Companhia Siderúrgica Nacional	0.71	-1.00	-58.43%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Ternium SA AI Stock Analysis