MEXICO: Morgan Stanley Maintains on Cemex

In a report published Wednesday, Morgan Stanley analyst Nikolaj Lippmann maintained Overweight on Cemex SAB de CV (NYSE: CX [FREE Stock Trend Analysis]), raising its price target to $14.00 from $13.00.

According to the report, last year suggested the need for consolidation in Mexico, and that could be a structural game changer, but even without consolidation, 2015-2017 looks increasingly bullish.

“Consolidation in Mexico's cement industry came into focus after the Cemex-Holcim asset swap last year,” the report noted. “Further consolidation could be a game-changer with regard to the long-term profitability of the market. We include consolidation in Mexico in our RR and show a 750BP difference in Mexico EBITDA margin between bull and bear. We also include maps of Mexico's capacity by state, region and we map the country's construction spending.”

But even without consolidation supply looks more disciplined -Making small changes to estimates -Demand and cement pricing are turning the corner in Mexico

CX closed Tuesday at $12.85 with shares trading up at 2.72 percent.