Nemak (NEMAKA.MX): Relative resilient even in an Annual USMCA review outlook

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Nemak (NEMAKA.MX): Relative resilient even in an Annual USMCA review outlook

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03 Jul 2026 12:51:30 ET │ 13 pages

Nemak (NEMAKA.MX)

Relative resilient even in an Annual USMCA review outlook

CITI'S TAKE

Nemak stock performance has been weak since late September driven by

concerns about the USMCA renegotiations and a soft 2026 guidance. We

remain buyers on valuation, Nemak’s privileged position as sole supplier to Buy

most of its NA clients, and the possibility the Detroit Big 3 could be Price (02 Jul 26 14:00) P$3.21

reassessing their earlier decision to abandon sedans in favor of

Target price P$5.00higher-margin SUVs and trucks as Mexico remains a core production hub

for compact and midsize vehicles. Expected share price return 55.8%

Expected dividend yield 0.0%

Model update — We update our model ahead of 2Q26 set of results with minor Expected total return 55.8%

changes to our forecast, hence we reiterate our NTM TP at P$5.0/share, and our buy

rating. We see Nemak trading at 3.6x-3.0x 2026/27 EV/EBITDA. Market Cap P$9,175M

US$521M

2026 EBITDA still points to low end of the guidance — of $630 to $650m, with our

forecast at $631m. We forecast a 2Q26 EBITDA at $174m (-4,7% YoY / +36% QoQ),

4.2% ahead of consensus. Nemak will face tough YoY comps as Nemak reported an

unusual strong profitability in 2Q25. Consensus 2026 FY forecasts points to $662m.

Price Performance

USMCA Under Annual Reviews — The recurring renegotiation cycle structurally (RIC: NEMAKA.MX, BB: NEMAKA MF)

impairs the investment climate, deterring long-horizon capital commitments,

particularly in the automotive, electronics, and industrial manufacturing sectors.

The potential inclusion of a 50% US content clause remains as a possibility, while

North American content may remain ~75%.