Ternium raised to Buy at BofA as 'solid option' to play U.S. flat steel

[large bowl of molten metal at a steel mill. Steel production.]
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Ternium (TX [https://seekingalpha.com/symbol/TX]) up 2.8% in Monday's trading as Bank of America upgraded the Latin American steel producer to Buy from Neutral with a $47.50 price target, bumped up from $46, saying it is the bank's preferred vehicle to capture stronger than expected North American flat steel pricing.

BofA analysts led by Lawson Winder said 2027 marks a capital spending inflection point for Ternium (TX [https://seekingalpha.com/symbol/TX]) as the Pesquería expansion concludes, driving ~10% free cash flow yield, while the company also stands out as the primary beneficiary of a potential USMCA renegotiation leading to exemption from U.S. tariffs.

BofA also reiterated its Buy rating on Gerdau (GGB [https://seekingalpha.com/symbol/GGB]), primarily given the strength in the North America business, noting the company has ~90 days of backlog in the division and metal spreads are expanding.

The bank also believes Gerdau (GGB [https://seekingalpha.com/symbol/GGB]) is attractive compared to its peers, trading at 4.1x estimated 2026 EV/EBITDA and generating 7.3% FCF yield in 2026, which should move to 9%-10% over 2027-28 with capex dropping once key investments are delivered.

Companhia Siderurgica Nacional (SID [https://seekingalpha.com/symbol/SID]) was reiterated at Underperform by BofA, citing leverage concerns as the company accelerates P15 investments at the mining business.

MORE ON TERNIUM AND GERDAU

* Ternium: Strong Steelmaker Providing Both Growth And Income [https://seekingalpha.com/article/4883347-ternium-strong-steelmaker-providing-both-growth-and-income]
* Ternium Hit Hard By Trade-Driven Market Issues, But Not Out Of The Game [https://seekingalpha.com/article/4850780-ternium-hit-hard-by-trade-driven-market-issues-but-not-out-of-the-game]
* Gerdau: Up, And Back Down Again In 2026E (Rating Upgrade) [https://seekingalpha.com/article/4879877-gerdau-up-and-back-down-again-in-2026e]