Traxion Downgrading to Neutral on Lack of Momentum Despite Attractive Valuation

Research evidence excerpt

Traxion Downgrading to Neutral on Lack of Momentum Despite Attractive Valuation

Adj. EBITDA - 27E (Ps mn) 6,427 6,268 -2.5%

Mx$21.5 previously. Within our Mexico coverage, we favor the airports,

Quarterly Forecasts (FYE Dec)particularly GAP (OW) - more details here and on Figure 4.

Adj. EPS (Ps)

• USMCA Review: A Definition Is Yet to Come. The six-year review deadline Q1 2025A0.29 2026E0.02A 2027E

for the 2020 USMCA trade agreement falls on July 1, but a formal renewal is Q2 0.10 0.14

unlikely as ongoing and new tariffs continue to hinder negotiations, according Q3 0.20 0.29

to J.P. Morgan Economic Research Team. Talks may extend into late 2026 or Q4 0.28 0.47

FY 0.87 0.93 1.79

even 2027. While the main expectation is a multilateral deal with substantial

changes, there is an increasing risk that the US could opt for annual renewals Style Exposure

to secure more favorable terms. This scenario would prolong uncertainty,

especially since recent U.S. demands for rule changes and additional tariffs

have made discussions more difficult. Canada and Mexico have reiterated their

desire to renew USMCA for another 16 years, but the US has not agreed. If the

U.S. does not support an extension by July 1, the agreement may shift to annual

reviews for up to 10 years, though negotiations are expected to continue.

• Mexico's Economic Activity: Lagging the Rest of the Region. Mexico's

economic outlook for 2026 is characterized by subdued growth and cautious

monetary policy. J.P. Morgan forecasts GDP growth of just 1.0% y/y — below

even Banxico's revised 1.1% forecast — reflecting weak domestic demand and

declining capital investment and FDI at 2.0% of GDP. On the positive side, the

external sector offers some relief, with a US$4.5 billion trade surplus in April