Goldman Sachs and JPMorgan predict significant potential for unnoticed steel company

Goldman Sachs and JPMorgan recently expressed optimism about the potential for steel producer Ternium to strengthen its presence in South America, leading to significant upside for the stock. Ternium is a steel producer with operations in Argentina, Brazil, Columbia, Guatemala, Mexico, and the U.S. Both firms noted that Ternium’s better-than-expected prices in key markets like Mexico and Argentina were a driving force behind their positive outlook following the company’s strong first-quarter results.

Despite an overall lower volume, Ternium’s earnings beat expectations, leading to a slight downturn of approximately 5% in the company’s stock in 2024. JPMorgan has an outperform rating on Ternium stock, with a target price of $54 per share, indicating a potential 33% upside from the recent closing price of $40.31. On the other hand, Goldman Sachs has a buy rating on Ternium with a target price of $51 per share, suggesting a possible 27% increase in the future.

Goldman Sachs emphasized Ternium’s attractive valuation and 8% dividend yield as part of its bullish outlook on the stock. The firm also highlighted the company’s growing business in Mexico as a positive factor for future growth. Despite lower EBITDA guidance for the second quarter, Goldman Sachs remains confident in Ternium’s ability to achieve its full-year forecast of $3 billion. Morgan Stanley also has an overweight rating on Ternium stock, with a target price of $47 per share, indicating a potential 17% upside in the near future.

Overall, Wall Street analysts are optimistic about Ternium’s prospects in South America and believe that the company’s strong performance in key markets will drive growth and potentially lead to substantial gains for investors. With a presence in multiple countries and a focus on enhancing its operations, Ternium is well-positioned to capitalize on the recovery of the steel industry and take advantage of emerging opportunities in the region. Investors looking for exposure to the steel sector may find Ternium to be an attractive investment option with significant upside potential in the coming months.