Barclays upgrades Cemex to "Overweight"

Barclays raises rating for Cemex to "Overweight" citing potential for share price growth

Associated Press

NEW YORK (AP) -- A Barclays analyst on Wednesday upgraded Cemex SA to "Overweight" from "Equal Weight," saying that the Mexican cement company's shares have the potential to rise.

THE OPINION: Benjamin Theurer, who backed his $12 price target, noted that the company's shares have lagged the overall market by about 17 percent over the past four weeks, which makes their current price attractive to investors.

Theurer also noted that the U.S. housing market and cement-related spending are looking better. He noted that while new home construction rose less than expected in May, the trend remained positive. In addition, increases in building permits for future construction imply possible additional gains, he said.

The analyst said Cemex's profit growth will hinge on the recovery of the U.S. housing market over the next four years. He added that the company has continued to put in place price increases in the Americas, which is one of the main drivers for its profit growth for the near term.

THE SHARES: Up a penny to $10.55 in afternoon trading, after peaking at $10.87 earlier in the session. Over the past 52 weeks, the company's shares have traded between $5.30 and $12.57.

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