Cemex 2Q26: Pricing Power Drives a Margin Step-Up

Stronger earnings and cash conversion support deleveraging, while U.S. profitability remains below prior-year levels

We remain Neutral on Cemex and maintain our Buy recommendation on the CEMEX 5.750% 2036 notes, which have been our preferred curve expression since issuance in June. As discussed in our new-issue report, Cemex Prices US$1.5bn 5.750% 2036 Senior Unsecured Notes, the original call reflected the bonds’ carry, liquidity, near-par entry point and more efficient access to the long end of the Cemex curve. Since then, secondary-market widening, stronger free cash flow and further deleveraging have increased our conviction in the Buy. The issuer remains Neutral because value is concentrated in the 2036s rather than broad enough across the curve to support an issuer-level Overweight.

Fundamentals continue to improve. Net leverage including perpetual notes declined to 2.1x from 2.3x, while the ex-perpetual measure increased modestly to 1.8x from 1.7x following the cash redemption of the subordinated notes. EBITDA interest coverage improved to 7.5x and FFO to gross debt reached 34.4%. The new $3.0 billion revolving facility, an average debt life of 5.4 years and approximately $741 million of maturities through 2028 compare with $2.95 billion of liquidity, making near-term refinancing risk a secondary consideration. We think Cemex is approaching metrics capable of supporting a one-notch upgrade, and Fitch revised the Outlook on its BBB- rating to Positive in April 2026, but our recommendation remains anchored in fundamentals and valuation.