Traxion (TRAXIONA.MX): Eyes on cash flow

Research evidence excerpt

Traxion (TRAXIONA.MX): Eyes on cash flow

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29 Jul 2026 11:34:23 ET │ 12 pages

Traxion (TRAXIONA.MX)

Eyes on cash flow

CITI'S TAKE

Buy Traxion continues to face a tough environment between weak demand

and higher energy prices, although management reported some early Price (28 Jul 26 14:00) P$10.94

signs of market recovery. 2026 is about generating cash flow and reducing Target price P$21.00

net leverage, implying M&A may be delayed, which could prove to be a Expected share price return 92.0%

relief for equity investors. We see Traxion trading at 0.4x 2026YE P/BV, Expected dividend yield 0.0%

and shares could experience a relief rally if the cash flow / deleverage case Expected total return 92.0%

is de-risked.

Market Cap P$5,934M

US$340M

Model update — We update our Traxion model after a 4% miss to consensus

EBITDA, although it was in line with our forecast. We also update our macro

assumptions. We keep our target price of P$21/share and our Buy rating. We see

Traxion trading at 0.4x 2026 P/BV and 3.2x–2.4x EV/EBITDA. Andrés CardonaAC

+57-601-484-0441

Lowering EBITDA on energy volatility — While we still forecast +10% YoY growth andres.cardona@citi.com

for revenue (in line with guidance), we lower our EBITDA margin assumption to

14.4% (from 15.7%) as higher oil prices are undermining profitability and volatility is Matheus Tostes

making pass-through negotiations more challenging. Our new EBITDA forecast +55-21-4009-0406

implies MSD growth to P$5.55bn, 3.6% below our old forecast. We still forecast a matheus.tostes@citi.com

P$1.9bn capex program as Traxion remains selective on organic growth while

favoring cash flow generation. In this light, we see net leverage declining towards

1.9x by 2026YE from 2.4x as of 2Q26.