2Q preview: Middle East conflict driving positive earnings impact; Alpek preferred: Earnings Preview

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2Q preview: Middle East conflict driving positive earnings impact; Alpek preferred: Earnings Preview

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LatAm Petrochemicals

2Q preview: Middle East conflict driving

positive earnings impact; Alpek preferred

Earnings Preview

Updating models ahead of 2Q; new petchem price deck 20 July 2026

We update our Alpek and Orbia estimates ahead of 2Q26 earnings, reflecting our latest Equity

petrochemical price deck. We keep our POs unchanged for Alpek (Buy) at MXN15.5/sh Latin America

and Orbia (Underperform) at MXN14.0/sh. We continue to prefer Alpek, supported by: 1) Oil & Gas

greater scope for upward EBITDA guidance revisions than at Orbia; 2) a faster Leonardo Marcondes >>

deleveraging trajectory, with leverage set to reach its target as early as this quarter, vs. Research Analyst

3.3x for Orbia by year-end; 3) a more constructive outlook for PET fundamentals than for Merrillleonardo.marcondes@bofa.comLynch (Brazil)

PVC, with PET margins still 30% above pre-Middle East conflict levels; and 4) strong Caio Ribeiro >>

cash generation prospects, with Alpek's FY26 FCFE yield expected to exceed 20%. Research Analyst

Merrill Lynch (Brazil)

Alpek: EBITDA to more than double QoQ; sound FCFE caio.ribeiro@bofa.comNicolas Barros >>

We expect Alpek to deliver very strong 2Q results, supported by robust earnings and Research Analyst

cash generation. We forecast volumes of 1.2mton, up 7% YoY and returning to growth nicolas.barros@bofa.com

after five consecutive quarters of contraction, supported by stronger demand related to

the World Cup. Comparable EBITDA is projected at US$318mn, more than twice the

previous quarter’s level and the strongest quarterly result since 2022. We expect EBITDA

to improve primarily by stronger PET spreads, which we estimate at approx. S$300/ton,