LATIN AMERICA EQUITY RESEARCH

Research evidence excerpt

LATIN AMERICA EQUITY RESEARCH

Latin America Equity Research

LatAm First to Market 08 July 2026

Top Stories

Americas Construction Materials (Adrian E Huerta/Elodie Rall)

2Q26 Preview: Expect Margins to Trough, Vols Remain Subdued, and Cement Pricing Still Weak; CX

Best Positioned

Ahead of 2Q26 earnings results, which kick off towards the end of the month, and following recent conversations with our

companies, we are updating our 2Q26 estimates. To this end, we broadly expect to see margin headwinds related to elevated

energy prices, particularly for aggs producers given the increase in diesel fuel costs, but view 2Q as the trough of margin

pressures for the year with mid-year price increases, improvement in underlying demand, and fading energy prices driving 2H

improvement. While cement operations are more insulated from energy cost headwinds, limited pricing realization and

subdued demand are likely to weigh on margins for these names as well. Notably, despite most January cement price

increases being pushed out to April, we saw limited price realization in April cement pricing data (here) across the industry and

little flow through into May data, with most companies we spoke to indicating trends in line with the industry data, keeping us

cautious on reported pricing into 2Q results. Meanwhile, we believe weather was a headwind to vols for some names,

particularly due to wet weather in Texas and the Southeast in April/May and the recent named storm that hit several coastal

markets around mid-June. Note that the Mountain region (CO, UT, ID, etc.) experienced more normal seasonal trends in 2Q

than the significantly beneficial weather seen in 1Q. That said, we are incrementally more positive on underlying demand

trends for the industry since 1Q (here).