Bloomberg News

Ternium Upgraded to ‘Buy’ at Goldman on Steel Outlook, Usiminas

January 24, 2012

Jan. 24 (Bloomberg) -- Ternium SA, Latin America’s second- largest steelmaker, was raised to “buy” at Goldman Sachs Group Inc. on rising prices for the raw material and gains from its purchase of a stake in Usinas Siderurgicas de Minas Gerais SA.

Ternium was upgraded from “neutral” and was given a 12- month price estimate of $27.80, according to an e-mailed report dated today by Marcelo Aguiar and Diogo Miura, Goldman Sachs analysts in Sao Paulo. The American depositary receipts declined 45 percent in the past 12 months to $22.64.

The premium Ternium and Tenaris SA paid for their 5.03 billion-real ($2.9 billion) acquisition of a 27.7 percent voting stake in Brazilian steelmaker Usiminas in November is priced into Luxembourg-based Ternium’s shares, according to the report. The stock price doesn’t yet reflect potential savings from the acquisition and future steel-price increases in Mexico and the U.S., the analysts said.

“Significant underperformance relative to peers since mid- November provides an opportunity” to buy the stock, the analysts said. Ternium “has one of the strongest management teams in the region with quality assets, and has strong value creation potential with expansions in Argentina and Mexico.”

--Editors: Carlos Caminada, Robin Saponar

To contact the reporter on this story: Laura Price in Buenos Aires at

To contact the editor responsible for this story: Carlos Caminada at

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