On Monday, JPMorgan made a notable adjustment to its stance on Grupo Mexico SAB de CV (GMEXICOB:MM) (OTC: GMEX) stock, shifting the rating from Neutral to Overweight. Accompanying this upgrade, the financial firm also increased the price target for the company's shares from Peso104.00 to Peso137.00.
The decision to upgrade Grupo Mexico's stock comes in light of a significant perceived undervaluation by the analyst. The company, which holds a controlling interest in Southern Copper Corporation (NYSE: NYSE:SCCO), is currently trading at what JPMorgan considers an excessively high discount to its net asset value (NAV).
The analyst highlighted that Grupo Mexico's NAV discount compared to SCCO is 53%, which is above the two-year historical average of 48% and surpasses the standard deviation range of 44-52%.
JPMorgan's analysis suggests that the current discount level is too substantial to overlook, despite potential risks like merger and acquisition activities. Speculation around Grupo Mexico's interest in Banamex has been a topic of discussion in the press, but even with such considerations, the analyst believes the discount presents an asymmetrical opportunity.
The financial firm foresees Grupo Mexico trading at 4.9 times its estimated enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) for the year 2025. With the revised December 2025 price target of Peso137.00 per share, JPMorgan anticipates a 39% upside from the current trading levels. This upgrade and new price target reflect a more optimistic outlook on the stock's potential performance.
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